China FTA: How they do it in the Philippines

The Chi­na-ASEAN (Asso­ci­a­tion of South East Asian Nations) nego­ti­a­tion of a “Com­pre­hen­sive Eco­nom­ic Coop­er­a­tion Agree­ment” is pro­gress­ing slow­ly. In March 2003 Chi­na offered an ASEAN an ‘ear­ly har­vest’ pack­age of lib­er­al­iza­tion of agri­cul­tur­al prod­ucts. But the Phlip­pines, an agri­cul­tur­al producer,has now reject­ed more than half of the pro­posed deal: bq. “Chi­na has offered 400 prod­ucts under the pro­posed agree­ment and is pre­pared to open up its mar­ket to Philip­pine com­modi­ties, Agri­cul­ture Under­sec­re­tary Segfre­do Ser­ra­no said. Depart­ment of Agri­cul­ture offi­cials have trimmed the Chi­nese list down to 175 prod­ucts to pro­tect Philip­pine farm­ers, veg­etable grow­ers, and poul­try rais­ers, he said. ‘They want to deny entry of Chi­nese veg­etable, pork, chick­en, rice and corn prod­ucts’, he said”.  “(“Philip­pines Inquirer”:http://money.inq7.net/topstories/view_topstories.php?yyyy=2004&mon=08&dd=18&file=5 _emphasis added_) Philip­pines has been one of the pro­mot­ers of the devel­op­ing coun­try demand for the right to con­tin­ue pro­tec­tion for “spe­cial prod­ucts”:http://www.inquit.com/article/268/flexibility-in-the-agriculture-negotiations in the WTO nego­ti­a­tions on Agri­cul­ture. The recent “Framework”:http://www.petergallagher.com.au:80/article/307/a-guide-to-the-wto-framework-agreement agree­ment con­cedes this mech­a­nism, with­out say­ing what ‘spe­cial’ prod­ucts are or how many prod­ucts the devel­op­ing coun­tries will be able to excempt from future tar­iff cuts. This sto­ry tells us some­thing about the Philip­pines objec­tives for the WTO as well as for the ASEAN-Chi­na FTA: it just so hap­pens that they want to pro­tect exact­ly the prod­ucts that Chi­na spe­cial­izes in pro­duc­ing (see my recent “paper(MS Word, about 270k)”:http://www.inquit.com/assets/public/ChinaFTA.doc on China’s agri­cul­ture trade). The Philip­pines Depart­ment of Trade and Indus­try claims that the Chi­nese offer of bilat­er­al lib­er­al­iza­tion would have been more accept­able to the Philip­pines if the ‘ear­ly har­vest’ pack­age had includ­ed indus­tri­al prod­ucts of export inter­est to the Philip­pines such as motor vehi­cle parts and micro­elec­tron­ics. The nego­ti­a­tions aren’t over yet, so we’ll see. But this may be shap­ing up as “another”:http://www.inquit.com/article/306/is-asean-integrating ASEAN trade agree­ment that lacks real sub­stance.

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