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EXTENSION OF SPECIAL TREATMENT OF RICE UNDER ANNEX 5 OF THE WTO AGREEMENT ON AGRICULTURE

EXTENSION OF SPECIAL TREATMENT OF RICE UNDER ANNEX 5 OF THE WTO AGREEMENT ON AGRICULTURE. Why did we request for an Extension of the Special Treatment for Rice?

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EXTENSION OF SPECIAL TREATMENT OF RICE UNDER ANNEX 5 OF THE WTO AGREEMENT ON AGRICULTURE

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  1. EXTENSION OF SPECIAL TREATMENT OF RICE UNDER ANNEX 5 OF THE WTO AGREEMENT ON AGRICULTURE

  2. Why did we request for an Extension • of the Special Treatment for Rice? • The Special Treatment for Rice or better known locally as Quantitative Restriction (QR) for Rice is the most full proof means by which we can protect our farmers • It fully addresses in a more balanced manner the interest of farmers vis-a-vis consumers • We should know the cost before giving it up

  3. Under the GATT-UR (General Agreement on Tariff and Trade, Uruguay Round), the Special Treatment for Rice, technically expired last June 30, 2005. Under the Doha Round, the Philippine Government filed its Notification for the Extension of Special Treatment for Rice Under Annex 5 in 29 March 2004 through the Philippine’s Permanent Mission in Geneva, Switzerland.

  4. ANNEX 5 • Special Treatment With Respect to • Paragraph 2 of Article 4 • Section B Paragraph 8 • Any negotiation on the question of whether there can be a continuation of the special treatment as set out in paragraph 7 after the end of the 10th year following the beginning of the implementation period shall be initiated and completed within the time-frame of the 10th year itself following the beginning of the implementation period. • Section B Paragraph 9 • If it is agreed as a result of the negotiation referred to in paragraph 8 that a Member may continue to apply the special treatment, such Member shall confer additional and acceptable concessions as determined in that negotiation.

  5. Approval for our Bid to Extend the Special Treatment for Rice is subject to Negotiations. During the Negotiations, other countries requested for concessions in exchange for the Philippines’ Request for Extension of the Special Treatment for Rice.

  6. Nine (9) countries signified their intention to negotiate with Philippines, namely: 1. Argentina 6. India 2. Australia 7. Pakistan 3. Canada 8. Thailand 4. China 9. U.S.A. 5. Egypt

  7. Concessions Agreed Upon During the Negotiation are • the following : • a) Fundamental Issues: • - QR for rice to be extended for seven (7) years or until 2012. • - Argentina - China - India - U.S.A. • Canada - Egypt - Pakistan • b) Country-specific quota (csq) for: • - Australia - 15,000 MT milled basis • - China - 25,000 MT “ “ • - Thailand - 98,000 MT “ “ • - India - 25,000 MT “ “ (not notified) • c) In-quota tariff reduced from 50% to 40% from the beginning of the • extension and until the implementation of the extension period. • d) The Minimum Market Access (MMA) increased to 350,000 MT • from the 1st year of the extension and throughout the implementation • of the extension period.

  8. Commitments for Non – Rice Commodities 1/ Most Favored Nation 2/ Common Effective Preferential Tariff Source: Tariff Commission

  9. Prevailing World Average Prevailing Estimated Landed Est. Tariff to Equate Market Price 15% Monthly Wholesale Cost at Tariff of: Import Cost to Prevailing Month Thai Rice FOREX Price Wholesale Price (US$/MT) (PhP/1US$) (PhP/kg) Ex-First Warehouse (P/kg) 50% 40% % January 275 52.617 20.88 26.04 24.45 14 February 283 51.817 21.13 26.33 24.73 14 March 288 51.219 21.70 26.56 24.95 17 April 289 51.360 21.49 26.71 25.09 15 May 290 51.127 21.63 27.18 25.53 16 June 292 53.157 21.71 27.87 26.17 12 July 295 52.398 21.86 27.78 26.09 13 August 297 51.362 21.79 27.35 25.69 14 September* 297 50.242 21.40 26.68 25.05 14 Average, 2005 275 55.069 20.93 27.41 25.75 9.50 Estimated Landed Cost of Rice at 50% and 40% Tariff vs. Prevailing Wholesale Price of WMR, Philippines, 2006 * As of 21 September 2006

  10. RICE MMA vs. ACTUAL RICE IMPORTS, PHILIPPINES, 1995-2006 (in Metric tons) YEAR MMA Actual Volume MMA/Actual Imports of Imports % 1995 (July to December) 29,685 257,263 11.54 1996 61,513 893,654 6.88 1997 65,079 733,381 8.87 1998 97,061 2,126.531 4.56 1999 111,994 833,148 13.44 2000 119,460 631,641 18.91 2001 134,395 754,328 17.82 2002 164,265 1,246,616 13.18 2003 194,135 935,248 20.76 2004 224,005 998,699 22.43 2005 238,940 1,850,706 12.91 2006 238,940 1,606,955* 14.87 Note: The MMA of 350,000 MT accounts for only 55% and 28%, respectively, of the lowest and highest volumes imported in years 2000 - 2005 *contracted in 2006

  11. THANK YOU

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