ASEAN likely to exclude rice from free-trade plan

ASEAN likely to exclude rice from free-trade plan

SINGAPORE (Reuter): ASEAN agriculture ministers meeting here for three days beginning today to liberalize farm trade will exclude key commodities, including rice, from tariff reductions, economists and agricultural officials said.

The reductions would be part of ASEAN's regional free-trade plan targeted to be implemented by 2003. Whether the exclusions from the cuts end sometime after that year will be up for debate.

While the ministers are expected to agree to minimal tariffs on about half of the commodities traded in the region, analysts said the opening up of rice or sugar markets to imports remains a contentious issue among the group's seven members.

"Despite rapid industrialization, ASEAN's dependence on agriculture is still strong," a Singapore economist said. "Furthermore, their agriculture product-wise is not very different. As such, this is a likely area of conflict."

ASEAN members other than Singapore and Brunei are major rice growers, and some are major exporters as well. ASEAN, the Association of Southeast Asian Nations, groups Brunei, Indonesia, Malaysia, the Philippines, Singapore, Thailand and newcomer Vietnam.

The group is trying to implement the ASEAN Free-Trade Area (AFTA) by the year 2003. By then, under the AFTA preferential tariff scheme, tariffs on most goods of ASEAN origin would be lowered to between zero to five percent.

The Aug. 24-26 meeting is expected to confirm the list of agricultural products to be included in AFTA's Common Effective Preferential Tariff (CEPT) regime, delegates said.

Sensitive

Senior officials meeting since Monday to prepare for the talks said there were still unresolved questions over sensitive commodities such as rice, which were excluded from the list.

The issues include when to end the exemptions, one official said.

Indonesia has said it planned to exclude 26 products from tariff reductions.

"The 26 agricultural commodities are grown mainly by smallholders and because of that we will not open the domestic market in order that farmers are not exposed to any risk," Agriculture Minister Sjarifudin Baharsjah said in Jakarta.

Philippine sugar millers warned over the weekend that the ASEAN free-trade plan would seriously harm the ability of local sugar farmers to survive.

Thai Finance Minister Surakiat Sathienthai said on Monday that Bangkok would signal to other members its sincerity and readiness to include unprocessed agricultural products in the scheme.

He told reporters Thailand's sensitive list would be cut to seven items from 47.

Surakiat said some member countries were not ready to include rice, of which Thailand is a major exporter, in the AFTA regime and he was prepared to use rice to bargain with other members.

"Thailand will greatly benefit from the inclusion of rice in the tariff reduction scheme," Surakiat said.

Vietnam, a major rice producer which joined the grouping last month, will be exempted from the scheme until January, he said.