The Philippines will contest the decision of the European Commission denying the country’s petition for incremental export quota allocation of canned tuna saying the government has basis in asking for additional export volume.
Senior Trade and Industry Undersecretary Thomas G. Aquino expressed confidence that EU will see how the Philippines justifies its request. The Philippines sought the increase based on the expanded demand as EU has grown to 25-member countries from 15.
But the EU denied the country’s bid for the expansion of the export quota for periods 2005-2006 and 2006-2007 on grounds that the scheme could not be applied to the expanded EU-25, but only to the original 15 countries since that was the composition of the market when the mediation was concluded whereby the resulting regulation was approved.
“The Philippines is currently refuting this decision with the applicable provisions of General Agreement on Tariffs and Trade as basis with respect to applicability of duties and other regulations of commerce in the context of an enlargement of a customs union,†Aquino said.
â€We have to get back to them and dispute or contest the basis how they look at it because it is different from how we look at it,†Aquino said.
He noted though that EU is giving preference to its former colonies, the Africa, Caribbean Pacific countries in the exports of canned tuna. But in giving them preference, they are also impairing our exports and they should address the impairment,†Aquino said.
The Philippines’ request for improved quota was based on the five-year agreement the Philippines entered with EU in April 2003 on the tuna exports wherein the Philippines can ask for additional quota corresponding to the annual growth in demand of the product.
Based on the agreement, the quota for tuna exports will be increased by a growth factor of at least 3 percent per year starting 2004, with a margin for adjustment from 2005-2007 depending on developments in the EU market.
In the said agreement, EU granted a total of 25,000 metric tons in canned tuna exports at a preferential in-quota tariff of 12 percent from three ASEAN countries: Philippines, Thailand and Indonesia in a negotiation spearheaded by former DTI Secretary Manuel A. Roxas II with then EU Trade Commissioner Pascal Lamy.
Of the 25,000 MT canned tuna exports, the Philippines’ annual allocation for the 12 percent preferential in-quota tariff is 9,000 metric tons, Thailand with 13,000 and Indonesia 2,750 while other countries are 250 metric tons.
Should the Philippines exports more than that, the additional exports would be slapped with the regular tariffs of 24 percent. This is the first time the Philippines to ask for quota adjustment with EU since the agreement was clinched in 2003.
Aquino stressed that the Philippines’ request should be favorably granted considering the continued noticeable increases of the market base in EU. “Our position is based on nominal growth of the EU market and the expansion of the economic bloc from 15 to 25 member countries in 2004,†he said.
The Philippines has since then continuously and actively negotiated with the EU for the expansion of the said quota with the collaboration of the Tuna Canners Association of the Philippines.
It could be recalled that ASEAN countries’ were then fighting for the implementation of a consensus agreed during the WTO Ministerial Conference held in Doha 2001 granting EU’s request for a waiver under Article IX.3 of the WTO Agreement on the preferences accorded by the EU to ACP states under the Cotonou Agreement, subject to a favorable consideration of the position of the Philippines and Thailand.
Local tuna canners cheered that successful forging of the agreement by Roxas saying the lower tariff would translates to better protection and increased job opportunities to the over 150,000 people who depend on the tuna industry for a living.
Also, the lowered tariff for Philippine tuna could translate to some 2,500 direct and indirect jobs generated for the country, according to Roxas.
Back in 2003, the Philippine production capacity for canned tuna is 13 million cases and 20, 000 metric tons for other processed tuna per year. Exports average at $ 13.2 million a month.
For the January-April period in 2003, tuna exports amounted to $ 52.8 million, 39.5 percent higher than the $ 39.85 million grossed last year. The Philippine tuna exports vary from fresh, chilled, frozen, dried smoked to canned tuna. It is the country’s second biggest marine products exports with a 25 percent exports share, next to shrimps and other marine products at 29 percent.
The country’s major markets for tuna include the United States, Singapore, European Union, Japan and Canada among others.