Tariff turbulence propels ASEAN rethink

Dumping fears

The effect of the tariffs goes beyond the magnitude of the rates hurting ASEAN states' export earnings.

The concessions offered to the US are mostly one-sided in favor of Washington, said Yose Rizal Damuri, executive director of the Centre for Strategic and International Studies in Jakarta.

The Philippines, for example, concluded negotiations with the US by allowing duty-free access of US goods to its local markets. This spells trouble for Philippine producers and industries, which are not competitive, he said. The Philippine food and agriculture sector is especially vulnerable.

Zero tariffs on US farm products like corn and soy could lower the cost of production of Philippine poultry and livestock raisers, said Marie Annette Galvez-Dacul, executive director of the Center for Food and Agri Business at the Manila-based University of Asia and the Pacific. The domestic market may also be swamped with low-cost US meat, undercutting local producers.

"Dumped US farm surpluses could depress prices and squeeze Filipino farmers. The government can guard against this with trade remedies and farmer support," Galvez-Dacul said.

Danilo Fausto, president of the Philippine Chamber of Agriculture and Food Inc, said discussions with Philippine officials revealed that some products such as corn are exempt from the duty-free access agreement.

"Some of the Philippine feed millers would like corn to be included in the zero tariff so that the import cost will be lower. But it might (hurt) the local corn farmers. So we have to balance these things," Fausto said.

He said he's also concerned about the possibility of dumping US food products in the market. The US, for example might dump their milk products in the Philippines, which will harm local dairy farmers.

"They cannot recover (from the dumping) or even develop the industry going into the future," Fausto said.

Fermin Adriano, former Philippine agriculture undersecretary, said improving productivity by boosting the budget for different crops could help the competitiveness of local agricultural products.