The Philippines government has agreed to compensate Thailand for maintaining an import tariff on rice by allocating a quota of 370,000 tonnes for Thai rice.

Commerce Minister Porntiva Nakasai yesterday said Manila had accepted the proposal made by Thailand.

In addition, exports from Thailand under the quota will be duty-free.Bangkok proposed a 370,000-tonne special import quota based on its three-year export performance to the Philippines.

Six Asean countries - Thailand, Malaysia, Indonesia, Singapore, Brunei and the Philippines - eliminated tariffs on 99 per cent of goods under the Asean Free Trade Agreement (AFTA) on January 1.

However, the Philippines, Malaysia and Indonesia have placed rice on a sensitive list, which means they can maintain their import tariffs.

"The draft agreement concerning compensation is being finalised by the two countries," said Porntiva, adding that once the draft is complete, it will be put to the Cabinet for approval and implementation. Thai rice exports outside the quota will remain subject to a high import tariff of 40 per cent.

Meanwhile, Porntiva said the government would consider the Philippines' proposal to reduce its import tariff on sugar step by step.

The proposal offers Thailand a reduced tariff of 38 per cent from 2009 to 2011, 28 per cent in 2012, 18 per cent in 2013, 10 per cent in 2014 and 5 per cent in 2015. The Philippines has refused to cut its import duty on sugar under AFTA.

The ministry also yesterday met with rice traders and exporters to explain the government's regulations on imports.

The measures have been introduced to protect lower-quality rice from other Asean countries being brought into Thailand and then resold to third countries as if it were Thai rice - a practice which would damage the image of local produce.

Imports of rice have to be approved by the Foreign Trade Department, besides which importers have to meet the agency's sanitary, phytosanitary and other standards.

The ministry will also closely monitor all rice imports by sending experts and officials to inspect incoming shipments.

In addition, the public can contact an AFTA 1385 hotline to register complaints.

Source: The Nation