Trade group bats for recalibration of tariffs

By Niel V. Mugas
Published on Page B2 of the August 2, 2006 issue of the Manila Times

THE Fair Trade Alliance (FTA) wants immediate recalibration of Philippine tariffs as a measure to increase government revenues and at the same time diminish distortions in the country’s trade practices.

Rene Ofreneo, FTA convener, said in a press briefing Tuesday that recalibration of tariffs is an approach that will benefit the country given that the Philippines has one of the lowest applied tariff rates in the world.

The FTA has proposed that the government increase the tariff rates of bounded products that are produced in the Philippines, while products that are not produced locally should be slapped with lower tariff rates.

Such scheme, Ofreneo urged, must be done immediately while the Philippine comprehensive tax review program (CTRP) is being completed and negotiations for the Doha Development Round remain suspended.

Recent talks on the Doha Round broke down with countries failing to agree on the terms of market liberalization, particularly the removal of trade-distorting agricultural subsidies. As a result, world trade talks have been suspended, making it impossible for negotiations to be completed by 2006 as earlier seen.

Weighing in on the situation, Ofreneo said “the Philippines must take this opportunity to rethink” as the 2006 deadline “is already difficult to achieve” but the “inequalities” persist.

The Philippines’ average bound rate is 20 percent and about two-thirds of the country’s entire tariff lines are already bounded, meaning already having a certain tariff ceiling.

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  1. First world protectionism is killing the thrird world farmers. Huge subsidies that these super economies grant their farmers brings production down while ours remains high. It is so lop-sided that our agriculture secter dwindles every year. While few try to stick it out, they face the reality that our government just can’t prioritize this sector. We are basically an agricultural country, therefore the government must see to it that our farmers are protected. But instead, they allow us to be the dumping ground of surplus produce mostly from China. Unless the richer nations stop this practice of unfair trade, liberalization and the globalization will never work.

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