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.