Trump tariffs and agriculture
The recently announced Trump Tariffs will significantly harm our agriculture sector, especially coconut farmers. For example, increasing the US tariffs for their coconut products from 5 percent to 19 percent will severely affect 3.5-million coconut farmers in 65 out of our 82 provinces.
But there is still time for urgent action. According to RCBC chief economist Michael Ricafort: “These tariffs are still subject to negotiations with the US if these rates would be lowered by the Aug. 1 extended deadline.”
First, we must try to get an exemption for our agricultural products from this 19-percent universal tariff. If not, we must move quickly for a Philippine-US bilateral trade agreement so that the tariffs are more carefully and responsibly determined on a per-product basis.
Second, we must strengthen our agriculture export initiative. The good news is that our 2024 agriculture export growth was at 21 percent, even better than Vietnam’s 18 percent and Thailand’s 6 percent.
The bad news is that we have a long way to catch up. Our agriculture exports were only $7.8 billion, compared to Vietnam’s $62.4 billion and Thailand’s $52.2 billion.
Tariff negotiations
Last April 25, nine agriculture coalitions and organizations submitted a unanimous position on the proposed Philippines negotiating approach. They argued that agriculture products should be exempted from any increased Trump tariff.
The Trump tariff objective is to decrease the US $900-billion trade deficit. However, for Philippine agriculture products, the US has a huge surplus, not a deficit: they export two and a half times what we import from them!
Furthermore, as the April 25 position stated: “The Philippines is an ally of the United States. The US should not penalize agriculture exports with a uniform tariff that will harm millions of small farmers and fisherfolk.”
If a renegotiation is not successful, we should turn this threat into an opportunity. Perhaps because of time constraints, a careful study may not have been made to include our critical strategic security and economic relationship with the US.
In addition, a product-per-product tariff analysis may not have been thoroughly done, which is necessary during the forging of bilateral trade agreements. This is now an opportunity to formulate such an agreement.
In a July 24 joint statement, Special Assistant to the President for Investment and Economic Affairs Secretary Frederick Go and Department of Trade and Industry Secretary Cristina Roque said that they are now working on these bilateral agreements. They will “open new opportunities, strengthen our global trade partnerships, and ensure our exporters remain competitive in an increasingly complex international trade environment.”
We commend both officials for their steadfast refusal during the recent negotiations to decrease any import tariffs for our critical agriculture products. Tariffs should be responsibly decided on a per-product basis, done through bilateral trade agreements that benefit both parties.
Improving agriculture exports
Given our current situation, we should now decisively move in strengthening our agriculture export initiative. At the June 30 quarterly meeting of the Committee on International Trade (CIT) of the public-private Philippine Council of Agriculture and Fisheries, 15 recommendations were made.
The CIT has four working groups, each cochaired by a private sector leader and a Department of Agriculture Assistant Secretary. They are: Export Development, Promotion and Regulation; Trade Agreements, Negotiations and Remedies; Anti-smuggling and Border controls; and Monitoring, Evaluation and Impact Assessment.
Here are four key recommendations from the 15 that deserve immediate action:
• Update selected agriculture roadmaps with a focus on one- to two-year plans, using relevant input from the subsector commodity boards;
• Add more export revitalization programs, identifying one lead person for proper coordination;
• Set up a computer site for the newly formulated matrix for each target country’s export potentials and risks, thus enabling easy access for our exporters; and
• Set up a Customs Watch for countries that may illegally dump their excess supply to us, as a result of the new Trump tariffs.
We must now transform the Trump tariffs from a threat to an opportunity by taking the appropriate action, for the benefit of both our country and the United States.
