2010 Sep 30
September 30, 2010

ASEAN hits US policies

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Bloc raises concerns at WTO review

THE PHILIPPINES and its ASEAN peers have taken issue with United States policies that reportedly restrict trade.

High US tariffs on garments and crops, trade distorting subsidies favoring American agriculture and “frequent recourse” to antidumping probes were among the concerns raised by the 10-member Association of Southeast Asian Nations at a World Trade Organization policy review on Wednesday.

The WTO similarly pointed to the same issues in a report released in time for the biennial review of the US trade regime. Nevertheless, the Geneva-based body lauded Washington for resisting domestic calls to raise tariffs at the height of the global economic downturn.

“[W]hile the [US’] simple average applied tariff has remained at the pre-recession rate of 4.8%, tariff peaks continue to exist in products of export interest to developing countries, such as agriculture goods, textiles, and footwear,” ASEAN said in a statement read at the WTO meeting in Geneva.

“[We] would like to urge the United States to undertake substantial tariff reductions across the board in both agriculture and nonagricultural market access negotiations,” the regional bloc said, referring to the delayed Doha round of negotiations seeking to forge a global trade deal.

The group counts the US as its second largest export market in 2009 after the European Union, accounting for nearly a tenth of the region’s $810-billion exports to the world.

The Philippines likewise considers the United States a key market, having cornered roughly 16.32% of export sales from January to July this year, official data show.

The country limits it sugar exports to the US within the duty-free quota Washington grants every year and is also lobbying for a bill in the US Congress to slash tariffs on Philippine garments exports that use American-made materials.

The statement came just five days after President Benigno C. Aquino III and his ASEAN counterparts met with US President Barack Obama. During the meeting, Washington signaled increased engagement with the bloc by committing to deploy a resident ambassador and confirming its attendance during the upcoming East Asia Summit.

Both parties likewise affirmed plans to intensify work on the 2006 Trade and Investment Arrangement, this time by focusing on trade facilitation and finance.

ASEAN went on to urge the US to “avoid any form of support [provided by the US Farm Act] that could distort trade, particularly given that the United States is one of the world’s leading agricultural producers, and hence has the potential to effect world prices and international trade.”

The WTO estimated US farm subsidies at some $23.3 billion, described as the third highest in the rich country grouping called the OECD (Organization for Economic Cooperation and Development). Differences over the issue of farm subsidies provided by the US and EU have contributed to delays in global trade talks.

“[And] we regret the frequent recourse of the United States to such [antidumping] measures as it creates uncertainty for foreign exporters and stifles competition,” ASEAN added, echoing the WTO’s finding that Washington imposed a tenth more of such measures by end-2009 versus 2007.

Washington’s responses at the meeting to the ASEAN statement were not immediately made public.

Rebecca Brown Thompson, spokesperson for the US Embassy in Manila, reiterated in an e-mail Mr.

Obama’s statement last week that their country supported ASEAN’s aims of creating a more effective and integrated community.

In a separate report issued alongside the WTO document, Washington committed to give due consideration to developing economies but hinted at a “balanced and ambitious give and take among established or newly emerging trading powers.” –JESSICA ANNE D. HERMOSA, Senior Reporter, Businessworld