Sugar producers want gov’t to make representations with AFTA

The local sugar milling industry wants the government to ask the Asean Free Trade Agreement (AFTA) to put sugar containing flavoring or coloring matter in the sensitive list to protect domestic sugar producers.

This would allow the government to continue imposing the 48 percent tariff on these imported commodities instead of three percent under the Common Effective Preferential Tariff (CEPT) of the AFTA.

The Philippine Sugar Millers Association (PSMA) in a recent position paper sent to President Arroyo and the Tariff Commission (TC) said the government failed to transfer sugar containing flavoring or coloring matter in the sensitive list of AFTA-CEPT last July 1, 2003.

Under the AFTA agreement signed in Hanoi, Vietnam in October 1998, all products listed in the AFTA- temporary exclusion list should be transferred to the inclusion list at the reduced tariff rate of only three percent by July 1, 2003.

PSMA said the word "all" meant all agricultural and industrial products except those in the sensitive or exclusion list.

But while raw and refined sugar were transferred to the sensitive list before the effectivity of the new CEPT schedule last July, buying time for the local sugar industry until 2010, the government failed to include sugar with added flavoring or coloring.

Sugar producers are concerned that this loophole will further aggravate the situation as the industry is reeling from low millgate prices, a result of excess production and what they claimed as influx of cheap imported masked sugar.

"This loophole which allows industrial users and manufacturers to import sugar containing added flavoring and coloring matter at a low tariff rate of three percent can shift industrial demand to imports and cause the demise of the industry," PSMA said.

The PSMA said this loophole can be corrected by classifying all sugars and sugar containing products, in various forms, under the main Tariff Heading 1701 where they properly belong and immediately including all of them in the sensitive list of AFTA using the same procedures for raw and refined sugar.