The Philippines, a country the Trump administration is considering for an eventual free trade accord, has reached new agreements with the U.S. to work on improving agricultural trade, according to an announcement today from the office of the U.S. Trade Representative.
The Philippines has been mentioned by USTR Robert Lighthizer as a country the U.S. is interested in for a bilateral free trade agreement (FTA) and today's announcement could take both nations a step closer to that goal. One of the “outstanding issues” complicating such an FTA is differences over ag trade and tariffs, a government official told Agri-Pulse.
“Trade and investment have connected the Philippines and the United States for over a century and continue to underscore the close ties between the two countries,” USTR Robert Lighthizer and Philippines Secretary of Trade and Industry Ramon M. Lopez said in the statement. “Both governments agree that enhanced bilateral engagement on trade … should include work that yields benefits for agricultural producers, importers, exporters and consumers, and intend to work together in a number of areas.”
The Philippines, with its population of about 105 million, is an ideal ag trading partner for the U.S. in many ways, government and industry officials tell Agri-Pulse. The U.S. sells beef, pork and dairy to the Philippines and, in return, the Southeast Asian nation exports products like mangoes and coconuts to the U.S.
But the trading relationship could be much better. There are plenty of Philippine tariffs and infrastructure limitations that hamper U.S. exports.
The Philippines levies tariffs averaging 20.5 percent on U.S. meat products, with the highest rate at 45 percent, according to data compiled by the World Trade Organization. Those tariffs could always go higher, though. Under WTO rules, the country can charge duties as high as 100 percent.
Like Japan, the Philippines employs a complex scheme to determine duties on imported pork. The government sets a reference price that gives it great control over what products can come in and what cannot.
The Philippines “has significantly suppressed demand for U.S. pork products, particularly for lower-priced cuts and pork offal,” a spokesman for the National Pork Producers Council told Agri-Pulse. “An FTA would eliminate both tariff and non-tariff barriers such as the country’s requirement that pork imports be put in cold storage facilities and its restrictions on permits for importers.”
The issue of “the development of cold chain requirements and best practices in the Philippines” needs to be addressed, the USTR announcement stressed. “This work will build on private sector and local efforts already underway in the Philippines to improve the existing cold chain.”
One area of Philippine agriculture policy lauded by the USTR was the country’s promise not to restrict the use of cheese names like parmesan and asiago to products that only comes from Europe. The European Union has been campaigning for years to get countries to recognize what they call geographic indications, or GIs, to protect food names from general use.
“The United States welcomes the commitment of the Philippines to further discuss ways to ensure that Philippine laws, regulations, and policies do not restrict or prohibit entry of U.S. products in the Philippine market,” the USTR said in the statement. “The Philippines confirms to the United States that it will not provide automatic GI protection, including to terms exchanged as part of a trade agreement.”
Not addressed in the statement today is the strong opposition by some U.S. lawmakers who say the administration should not be forging deals with the Philippines so long as it is led by controversial President Rodrigo Duterte, who is accused of human rights abuses.
“Duterte’s atrocities should not be awarded by Trump with a trade deal: No sweet trade-deal hugs for thugs,” said Rep. Lloyd Doggett, D-Texas, in a recent statement. “There are more appropriate partners for any new trade agreement.”
Sen. Orrin Hatch, R-Utah, disagrees. “I’d prefer (the Philippines) not to have human rights issues, but the fact of the matter is, it’s an important country and we need to work with them,” he said.
