WASHINGTON’S decision to exempt certain agricultural products from the reciprocal tariffs amid cost pressure in the United States will whet their appetite for local produce and hike the Philippines’s domestic farm output, according to agriculture groups.
This, after US President Donald Trump further modified the scope of the reciprocal tariffs, allowing certain farm goods to enter their country tariff-free, particularly those not locally produced in the US. This includes bananas, coffee, tea, and coconuts, among others.
The Philippine Chamber of Agriculture and Food Inc. (PCAFI) said the move bodes well for the country’s farm sector, which was previously levied a 19-percent tariff rate.
‘This is good news for us since our export products to the US will be more competitive,’ PCAFI President Danilo Fausto told the BusinessMirror on Wednesday. ‘We can anticipate increased demand, which will boost our local production.’
While the US government’s move could buoy domestic confidence, Sinag Executive Director Jayson Cainglet raised a caveat that Washington could still decide to lift the exemption.
‘It will [help the country’s farm exports to the US] during this suspension, but they could still unilaterally increase them,’ Cainglet told this newspaper.
‘This move wasn’t borne out of our bilateral negotiation with them. It was more because of a domestic concern on their part,’ he added.
A White House statement said its decision came after ‘the substantial progress in reciprocal trade negotiations’ and ‘current domestic demand for certain products, and current domestic capacity to produce certain products, among other things.’
Lower levy
Meanwhile, Cainglet also urged the government to push for the reduction in the current 19- percent reciprocal tariffs for Philippine goods other than those currently exempted.
‘Several countries have already made notable progress, just days ago, in their engagements with the US,’ he said.
‘What we are still awaiting from our trade negotiators is meaningful progress toward reducing the 19 percent reciprocal tariff, a benchmark that many other countries have already achieved.’
Frederick Go, Special Assistant to the President for Investment and Economic Affairs, on Tuesday said the government will continue negotiations to lower tariffs on other Philippine exports such as garments, travel accessories, leather goods, and furniture, which form part of the country’s overall shipments to the US.
Furthermore, Cainglet called on the government to clarify the zero-rated import duties on select US products under the agreement.
‘We also seek clarification on whether there is a formal commitment that a zero percent tariff on US imports will not be adopted, despite long-standing lobby from US meat and soya exporters,’ he said.