July 20, 2006

Philippines may open up grains market

The Philippines may open up its market for US grain imports like soy, wheat and rice as a trade-off to the Philippines' proposed preferential trading agreement on the garment sector, a representative from the Confederation of Garment Exporters of the Philippines (CONGEP) said.

The US is interested to pursue discussions with the Philippines but Philippines would have to look at other sectors that can be opened up for them, George Siy, a representative from CONGEP said.

Products under consideration are wheat and soymeal as these are not produced locally and the country imports up to US$300 million of wheat annually.

Imported feed wheat is imposed with a 7 percent tariff currently.

Last year, the country imported about 600,000 tonnes of feed wheat from the US and Canada.

Imported soymeal has a 3 percent tariff. Last year imports reached 1.3 million tonnes, with 30 percent of it coming from the US.

Siy said the Philippines has to engage the US in discussions as neighbouring countries like  Malaysia and Thailand are close to reaching a free trade agreement with the US while Laos and Cambodia are also courting favourable trade agreements.

The proposed arrangement with the US is largely the initiative of the local garment and textile industry and is being supported by the Department of Trade and Industry. The garment sector employs over 400,000 workers in the Philippines. Garment and textile export is the country's second largest revenue earner.