RP sugar millers fears AFTA

RP sugar millers fears AFTA

MANILA (Reuter): Philippine sugar millers warned on Saturday that an ASEAN free trade area that will reduce tariff barriers on the sweetener will seriously harm the ability of local sugar farmers to survive.

Philippine Sugar Millers Association Executive Director Vicente Castro urged the government to include raw and refined sugar in the list of products exempt from the ASEAN Free Trade Area (AFTA).

Under AFTA, tariff duties on industries and products in the Association of Southeast Asian Nations will be cut to a maximum of five percent by 2003.

The ASEAN countries, Indonesia, Malaysia, Thailand, Singapore, Brunei, the Philippines and new member Vietnam, are compiling a list of goods and industries that will be exempt from the reduction in tariffs.

"Even if sugar is finally included in the sensitive list, we can expect a tariff rate only a little higher than five percent ... making AFTA more threatening to the Philippine sugar industry," Castro said.

The Philippine sugar harvest in the September/August 1994-95 season has been hit hard by drought, forcing Manila to reduce the forecast for the raw sugar harvest to just 1.75 million tons from 1.86 million tons in the 1993-94 season.

The bad harvest has created a shortage of sugar in the nation's retail markets, pushing prices of the sweetener up as high as 30 pesos (US$1.17) from 17 pesos (66 cents) three months ago.

Two million of the country's 68 million people work on sugar farms, mainly on the sugar-producing islands of Negros and Panay in the central Philippines.

Brunei has proposed that AFTA's implementation be speeded up and implemented by the year 2000. The group is studying the proposal.