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Philippines lowers tariffs on U.S. ag products

Daniel Whitley FAS administrator.jpg
USDA trade mission proves beneficial in temporarily lowering tariffs on corn, pork, poultry and dairy.

Tariff reductions and further opportunities to expand trade with Philippines was accomplished following a USDA trade mission to the eighth-largest market for U.S. agricultural goods, according to Foreign Agricultural Service Administrator Daniel Whitley.

Upon returning from the mission trip, Whitley reported in a call with reporters that 29 companies and 10 state departments of agriculture joined USDA to expand trade in the region with nearly 500 business-to-business meetings and government official discussions.

U.S. agricultural and food product trade with the Philippines is just over $3 billion annually during the last five years. “After being there on the ground, there’s a lot of potential to do a lot better,” Whitley says. “They are very, very interested in strengthening their trade ties with American agriculture. And there’s a lot of opportunity to increase our exports and our presence in the region.”

Key commodities that could benefit from increased imports into the Philippines include soymeal, corn, dairy products and pork. In addition, they unilaterally lowered their tariffs on corn, pork, poultry, dairy and potato products until the end of the year. “That just signals their interest in importing those commodities,” he says.

Whitley says during government official meetings, USDA did suggest making these tariff cuts permanent might be a good path for the nation. “We talked extensively about those tariff reductions to address inflation. We made the pitch that we thought it would be good policy to kind of look at opening those markets permanently and lowering those tariffs.”

He says he believes the country is taking that into consideration as well as thinking about improving some of the trade policy mechanisms they have in place and lowering tariffs is certainly one of them.

“I can't underscore enough how inflation is causing many of these countries and governments to take a second look at their policies. And from what I'm seeing what I would just label as decision making that makes a lot of sense for free and fair trade. So hopefully that benefits American agriculture in the short and the long run,” he says.

The Filipino people are very interested in U.S. soymeal and anticipate increasing their domestic animal agriculture sector which will require more soymeal and imports of more U.S. corn. “They do have a domestic corn industry, but it needs to be supplemented to meet their domestic needs,” he says.

The trade mission visited a soymeal packing house where U.S. soybeans and soybean meal were being packaged and processed for the animal agriculture industry in the Philippines.

“They have one of the fastest graduations of low-income consumers to the middle class. And these consumers are increasing their protein consumption in the form of meat commodities,” he says.

MOUs signed

The trade mission itinerary also included three memoranda of understanding signing ceremonies, including one to a launch a USDA-funded program to help combat African Swine Fever in the Philippines, another to formalize deeper trade ties between the Province of Batangas and U.S. state departments of agriculture, and a third between Mariano Marcos State University and the U.S. Grains Council to support biofuel solutions and climate smart practices.

“They are very interested in increasing their use of ethanol in their vehicle fleet, and they want to learn from our industry and all of our efforts, research and expertise to help them guide their path toward a more sustainable fuel for their vehicle fleets,” Whitley says of the MOU with USGC and Mariano Marcos State University.

In the government discussions, Whitley explains ethanol discussed extensively. “We wanted to share our expertise and experience. Ethanol can be a valuable commodity for your rural economies and your rural sectors. We talked about how ethanol can help address climate change issues and how we can help countries lead various commitments on climate change and sustainability.”

The U.S. ethanol industry has spent a substantial amount of resources and time doing research and identifying how ethanol works in different climates. For example, how it works in extremely humid and hot temperatures versus how well it works and in the more frigid areas. The MOU focuses on sharing that expertise and offering technical assistance.

“So hopefully this sort of leapfrogs the Philippines understanding of the benefits of ethanol, so they don't have to sort of start from scratch and determining, you know how well E15 works, how well E20 works, and increasing the ethanol use in the fuel fleet,” he says.

FAS and leaders from the Philippine Department of Agriculture and the Minnesota Department of Agriculture announce the launch of a new project titled “Capacity building in risk assessment to support safe international trade of U.S. pork products in the Philippines” to address challenges related to African swine fever.

The Philippines has had ongoing ASF outbreaks and is seeking better ways to control the virus and the subsequent food price inflation. NPPC worked with the Philippine embassy in Washington, D.C., to ascertain the needs of the Philippine government and producers for ASF outbreak management. The NPPC international affairs team partnered with the University of Minnesota to develop a proposal for government assistance that FAS graciously accepted and announced they would fund the project both in the Philippines and Vietnam.

TAGS: Trade
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