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Senate to grill Favila on sneaky trade accord

By Angie M. Rosales

10/23/2009

The Senate will summon Trade and Industry Secretary Peter Favila next week to seek his explanation over what senators saw as a stealthy implementation of an international agreement that will allow imported farm products into the country tax-free to the detriment of local agricultural products.

Sen. Loren Legarda, chairman of the Senate committee on agriculture, pointed out that the Asean Trade in Goods Agreement (Atiga), which was supposed to take effect on Jan. 1 next year, may not be legally enforced as senators have yet to concur with the accord, as required by the Constitution.

She cited a constitutional provision which states, in part, that no treaty or international agreement shall be valid unless concurred in by two-thirds vote of the Senate. “If it (Atiga) is an international agreement, why was it not submitted to the Senate,” she asked. “The Senate was kept in the dark,” she added.

At an impromptu press conference, Legarda told reporters that she had received information that Favila signed the Atiga in Bangkok, Thailand last Feb. 26 but that it was “intentionally kept from the public.”

She said the Atiga, reportedly part of the Asean Free Trade Agreement, was initially set to take effect in 2015 but the new tariff schedule was accelerated to 2010. It was touted to be an accord that would allow free-flow of goods among Asean countries but Legarda voiced fears it would open the floodgates and allow cheap products into the country without paying duties and taxes.

Aside from the Philippines, among the other signatories to the accord were Malaysia, Indonesia, Thailand, Singapore, Brunei, Cambodia, Laos, Burma and Vietnam.

Legarda learned, however, that Indonesia has requested for a two-year grace before implementing the accord and she suggested that the Philippines should ask for a similar deferment.

She warned that the Atiga will in effect waive billions of pesos in revenues from duties and taxes at a time when the country is hard put looking for additional sources of funds to deal with the calamity caused by recent typhoons.

“We are foregoing revenues while we are begging for aid from foreign donors,” she said.

Legarda is concerned that the tariff accord would also kill the livelihood of farmers and other local food producers because the government failed to provide safety nets for them in anticipation of the effectivity of the agreement.

“I am alarmed so I am appealing to the government to seek its deferment for humanitarian reasons,” she said. “Why are we in a hurry when this will adversely affect our people?”

In a separate letter to President Arroyo, the Federation of Philippine Industries Inc. also voiced misgivings about the impact to businesses of the Atiga. FPII warned that businesses will close down as a result of it contributing to unemployment.