Countries No. 9. Philippines:onions and tobacco
The Safeguard Measures Act of the Philippines in 2000 enables the Government to implement safeguard provisions under the World Trade Organization (WTO) Agreement on Agriculture (AoA).
Special safeguard (SSG) duties were implemented to respond to import surges of onions, while a request has been recently formulated for safeguards for tobacco. Low priced imports of onions, mainly from China, appear to be the main factor responsible for a surge in imports into the Philippines. The prices of imported onions are much lower than the wholesale prices of locally grown onions. For tobacco, farmers are concerned about the volume of imports which now exceeds local production, resulting in a decrease in their market share and threatening their livelihoods. However, the surge in imports is attributed to quality difficulties affecting local leaf, since import prices have been steadily above wholesale prices of local tobacco. Reductions in tariffs may also have facilitated the inflow of supplies from international markets. Under its unilateral tariff programme, the Philippines reduced overall tariff levels during 1999-2004, and the tariff rate quota (TRQ) for onions was eliminated in 2001. Since 1999, the applied tariff rate for unmanufactured tobacco has been much lower than the bound rate. Other factors contributing to the displacement of domestic production by imports include lagging production due to quality problems in the case of tobacco, rising costs of production inputs, lack of storage facilities, and inadequate handling and transport facilities. There is also a need to upgrade production technology and research. The Philippines government has established a very extensive and comprehensive system to deal with trade-related issues. This system provides the data and analyses needed to determine the presence of import surges in the agriculture sector and to define whether possible recourse should be taken to safeguard measures consistent with WTO provisions (bearing in mind the differing concerns of various stakeholders).
