MANILA, August 18 , 2004 (STAR) By Rocel C. Felix - The Philippines will submit a new list of 175 commodities for inclusion in the ASEAN-China Early Harvest Program.

Acting Agriculture Secretary Arthur Yap said the Department of Agriculture (DA) has prepared the list of commodities that will be opened up to the China market.

Under the ASEAN-China Framework Agreement on Comprehensive Economic Cooperation, member countries of the Association of Southeast Asian Nations are given preferred duty access to the lucrative Chinese market in exchange for the lowering of tariffs on products China plans to export to ASEAN members.

"This is a product of extensive consultation with the National Agricultural and Fishery Council (NAFC). This will still be finalized and sent to the Chinese government. If they say it is sufficient for us to qualify to join them in the early so be it. If not, we will consider other options because there is a regular track of reducing tariffs," said Yap.

Under the regular track the ASEAN has with China, the Philippines has more time to schedule the lowering of tariffs unlike in the early harvest scheme where tariffs could be automatically reduced to zero by 2005.

Yap said the country is willing to open up high value fruits but the struggling livestock, rice and corn sectors still need protection.

"Livestock, rice and corn we would benefit a lot if we open, but these are very sensitive areas. Livestock is cheap because corn is so abundant in China. Rice because of their hybrid technology," noted Yap.

On the other hand, Agriculture Assistant Secretary Segfredo Serrano said the country is still in a bind because it has a lot of sensitive sectors that could barely stand competition from the onslaught of cheap agricultural imports from China.

"We have a lot of sensitive sectors. China wants very few exceptions to Chapters 1 to 8 which cover unprocessed raw agricultural products. The bulk of our sensitivities relative to China belong to that group," Serrano said.

Rejection by China of the new list to be submitted by the Philippine government will cloud the prospects for the country’s export winners.

"The disadvantage of this is our export winners would be left behind in terms of accessing the China market. But then most of our exports to China pass through Hong Kong because there appears to be some difficulties accessing the different ports and markets in China because of certain differential rules, differential base rates that are difficult to hurdle and understand by our businessmen. We are still gathering information on the impact of the early harvest," Serrano said.

Serrano explained that a major concern is that such a trade agreement should build up domestic farmers’ confidence to undertake joint ventures and to extend adequate support to enhance their competitiveness.

"We are keen to join the early harvest program provided they accept our initial offer. We want to gradually prepare our farmers but to suddenly expose them would be unfair for the government," he added.

"Who are the ones going to be hit? Vegetables, corn farmers, livestock which is about 75-percent backyard. Those who would be hit essentially would be small players. We do not have yet at this time in our system a structural adjustment mechanism wherein the winners could compensate the losers," Serrano said.

Reported by: Sol Jose Vanzi

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