President Arroyo is coming home today from the long put off Association of Southeast Asian Nations (Asean) leaders summit in Thailand literally with juicy bacons of commitments for new debts and a likely lowering of tariff rates on rice that is expected to spell the doom of rice farming in the country.Thailand and the Philippines held talks yesterday aimed at ending a row over rice tariffs as a result of the long-held government position that the country intended to maintain a 35 percent duty on rice from Thailand which is asking for a drastically lowered 20 percent tariff.
Thailand, the world’s biggest rice exporter, has said it will delay the “trade in goods” agreement between Asean members if the Philippines fails to agree on its proposal.
Strangely, however, Arroyo is returning to the country with 620 metric tons (mt) of rice donation from Bangkok for the victims of typhoons “Ondoy” and “Pepeng” in Metro Manila and other parts of Northern Luzon.
Arroyo received the rice donation from Thai Minister Abhisit Vejjajiva during a symbolic turn-over ceremonies held over working lunch among the 10 Asean heads of state.
Abhisit handed a handful of rice grains to President Arroyo to symbolically represent the 620 mt of rice donations, 520 mt of which were initiated by the Thai
Trade Representative and coursed through the ASEAN Plus 3-East Asia Emergency Rice Reserve, while 100 mt were committed by the Thai Ministry of Foreign Affairs.
Trade and Industry Secretary Peter Favila the government is sticking to a 35 percent tariff on rice imports from Thailand since the country could not afford Thailand’s request of just 20 percent tariffs.
Thai commerce minister Porntiva Nakasai, however, said the government could keep tariffs at 35 percent if it committed to buying a certain volume of rice imports. But Favila said they can only commit to buying 50,000 MT from Thailand, lower than the request.
Arroyo also sought easier access to the $120-billion Chiang Mai Initiative Multilateralization (CMIM) liquidity fund to a distressed Asean member.
At the Asia-Europe meeting in Beijing in December last year, the ten Asean members plus China, Japan and South Korea, or ASEAN Plus 3, agreed to increase CMIM from $80 billion to $120 billion. The expanded CMIM will be launched by the end of the year.
Also, at the Summit, Arroyo granted the newly-created National Public-Private Reconstruction Commission a free hand to borrow from the $15-billion People’s Republic of China commercial credit for Asean-member nations to finance rehabilitation of infrastructures damaged by the two typhoons that destroyed about P18-billion worth of infrastructures and agricultural crops in Metro Manila and most parts of Luzon.
Favila said it was but right to leave the decision to the Commission as the President has tasked it to undertake a study of the causes, costs and actions to be taken in the wake of typhoons Ondoy, Pepeng and Frank, and to seek fresh aid to fund reconstruction as well as the rehabilitation program and raise the necessary funds for the purpose.
Government borrowings needed mandates from the Bangko Sentral ng Pilipinas but Favila did not say if the commission which is led by businessman Manuel Pangilinan had acquired the authority to borrow reserved for the government.
In a statement, Asean leaders said they looked forward to implementing a free trade agreement which forms a crucial part of plans to establish an European Union (EU)-style economic community by the year 2015.
The leaders’ statement also “urged member states to resolve the differences at the earliest opportunity”.
The summit of Asean leaders and their six dialogue partners China, Japan, South Korea, India, Australia and New Zealand ended in the Thai resort of Cha-am with the 10 heads of state signing the declaration launching the Asean Inter-governmental Commission on Human Rights, agreements to cooperate on climate change, and disaster management.
The summit focused on economic and financial cooperation, disaster preparation and response, food and energy security, and climate change.
The regional leaders reportedly agreed on responding to the global economic meltdown by “reviewing trade cooperation” as well as entering into free trade and economic partnerships.
Some 120 metric tons of rice donated by Thailand and some medicines are due to arrive in Manila by the end of the month while the 500 mt are expected to be delivered by February next year.
The People’s Republic of China announced that the first $1 billion of the commercial credit fund is “close to being in place.”
China also announced that it would raise the preferential part of the commercial credit by $5 billion to demonstrate China’s support for Asean-China cooperation on infrastructure.
The commercial credit will be provided in the next three to five years.
China is Asean’s fourth largest trading and investment partner. China’s trade with Asean accounts for 10.6 percent of ASEAN’s total trade.
In 2008, the bilateral trade volume was US$ 231.1 billion. China’s direct foreign investment in the Asean reached $2.18 billion in 2008, with an increase of 125 percent compared with that of 2007.
In April during the cancelled ASEAN Summit in Pattaya, Thailand, China announced its plan to establish an Asean-China investment cooperation fund designed for cooperation on infrastructure construction, energy and resources, information and communications.
Source: http://www.tribune.net.ph/headlines/20091026hed1.html
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