Thailand will use the Asean Summit to propose that the Philippines cut import tariffs on rice and raise rice import quotas in compensation for the latter's failure to honour the Asean Free Trade Agreement (Afta).

At the summit from Oct 23-25 in Cha-am, Thai economic ministers will discuss the contentious issue with their Philippine counterparts, as two rounds of talks involving senior officials have failed to reach a conclusion.

According to Nuntawan Sakuntanaga, director-general of the Trade Negotiations Department, Manila remains reluctant to cut import tariffs on rice under Afta as scheduled on Jan 1.

The six founding members of Asean are supposed to bring down their Common Effective Preferential Tariffs (CEPT) to between zero to 5% for all products, including those previously deferred under sensitive and highly sensitive lists, at the start of next year.

The Philippines wants to keep rice on its highly sensitive list with import tariffs at 40%, and in compensation offers an import quota at zero tariff for 50,000 tonnes of Thai rice a year.

The Philippines have recently signalled it would consider a 35% tariff, but the Thai side says the rate is still too high, as Malaysia and Indonesia have agreed to tariffs of 20-25%.

Mrs Nuntawan said Thailand would also seek a tariff-free import quota of more than 50,000 tonnes.

Indonesia wants to keep sugar and rice on its sensitive list, offering to cut tariffs on rice to 25% from 40% in 2015, and sugar to 5-10% in 2015 from 30-40% now. Malaysia is committed to cutting rice tariffs to 20% from 40% next year.

Source: Bangkok Post