President Duterte said the government would raise before the World Trade Organization (WTO) its concerns over the subsidies extended by Latin American governments to their banana producers, which have allowed them to export bananas at a lower cost.
While he vowed to also look into the request of major Filipino exporters to negotiate lower tariffs for bananas and to set up a council, he said the main concern “is really on back trade.” The President noted that Latin American governments shoulder the shipping cost of their banana exporters so they could cut the price of their product.
This practice allows exporters of bananas and other food products to negotiate marketing contracts with traditional Philippine export markets, Japan and South Korea, according to an earlier interview with Stephen A. Antig, executive director of the Pilipino Banana Growers and Exporters Association (PBGEA).
Duterte conferred with Agriculture Secretary Emmanuel F. Piñol during a news briefing after he witnessed the launching here of the TienDA Farmers and Fisherfolks Outlet Exhibitors, called the “TienDA sa Ayala Malls,” last Saturday night. The President described the subsidy extended by Latin American governments to their banana exporters as “back trade” and said this was an “unfair trading practice.”
Piñol said the Philippines would attend the next WTO meeting, which would kick off on December 10 in Argentina, and raise the matter before the multileral trade body. Banana exporters from Latin American countries have appeared as a serious rival of Filipino banana producers in Japan, South Korea and China in the last two to three years. PBGEA members also found that their Latin American counterparts were able to negotiate and win marketing contracts for cheap bananas, despite their distance from the Philippines’s Asian neighbors.
Antig said they found out that their respective governments have subsidized their shipping cost, a “major price fixer” in the market. He said David DeLorenzo, chairman of the board of the Dole Asia Holdings, has confirmed the drop in the world ranking of Philippine banana exports to sixth spot, from second spot in 2014.
But Antig warned that it would be an “uphill climb” to retake the country’s previous rank sans government intervention. He noted that the government did not give much attention to the banana industry because they are established and can fend for themselves.
“Yes, we are big but we are facing stiffer competition now. It’s not a competition by companies of respective countries, but it’s now a competition between countries,” he said. “Without government intervention, in two to three years, we can kiss the banana industry good-bye. We are losing our major markets to Ecuador and other exporting countries,” Antig added.
He said Philippine production remains expensive due to the infestation of pests, such as the Black Sigatoka and the dreaded Fusarium wilt.
Worse, he added, issues like climate change and the peace and order situation, as well as problems finding areas for expansion, “have made it harder for us to compete with Ecuador exporters who can ship their produce to Asia practically for free.”
Duterte and Piñol, however, have assured Filipino banana exporters that they are already looking into other domestic issues, including the set up of a banana council.
Written by Manuel Cayon
Source: Business Mirror