Thailand calls for sugar tariff cut

Thailand calls for sugar tariff cut

Dow Jones, Bangkok

Thailand's Commerce Minister Adisai Bodharamik has sent a
letter to the trade ministers of Indonesia and the Philippines,
asking them to consider setting a lower import tariff on sugar
from the Association of Southeast Asian Nations, compared with
sugar from non-ASEAN countries, according to a statement from the
Department of Business Economics Thursday.

The department operates under the Commerce Ministry.

Following the ASEAN Free Trade Agreement Council's decision
last September allowing a delay in cutting sugar import tariffs
for the Philippines and Indonesia, Thailand was concerned that it
would lose some export opportunities to the two countries.
Thailand is Asia's largest sugar exporter.

A lower import tariff on sugar from ASEAN countries would
maintain the competitiveness of Thai sugar exports to these two
countries, Chutima Bunyapraphatara, the department's deputy
director-general, said earlier.

Under the original plan, Indonesia and the Philippines were
supposed to start reducing tariffs on imports of sugar by 2002,
but this hasn't happened.

According to the AFTA Council, the Philippines was allowed to
place sugar on AFTA's sensitive list for imports, and Indonesia
was permitted to include sugar on its highly sensitive list. As a
result, the Philippines was allowed to freeze the sugar import
tariff rate at 50 percent for several more years before a phased
reduction beginning in 2004 to a maximum of 5 percent in 2010.
Indonesia, meanwhile, will start lowering the tariff in 2005, and
the final tariff rate will be allowed to exceed 5 percent.

During the two-day meeting of Asean senior economic officials
Jan. 31 to Feb. 1 in Bangkok, Thai officials encouraged senior
officials from Indonesia and the Philippines to set a lower sugar
import tariff from ASEAN nations, the statement said.

However, the setting of the import tariff is "a sensitive
issue in terms of politic concern," and the Indonesian and
Philippine officials "have no mandate to make any decision," it
said.

Indonesia currently imposes a 20 percent-25 percent import
tariff on sugar for all nations, while the Philippines applies a
rate of 65 percent.