WASHINGTON has raised concerns over Manila’s use of sanitary and phytosanitary import clearances (SPS-ICs) to restrict the importation of certain agricultural products for reasons “unrelated protection of human, animal, or plant life or health.”
The United States raised several questions regarding the Philippines’s non-issuance of SPS-ICs to “restrict” agricultural imports as a means to protect domestic industries in a recent World Trade Organization (WTO) Committee on Import Licensing meeting last week.
Agriculture Secretary William Dar held off comment for now until he sees the US document, while Trade Secretary Ramon Lopez saw nothing wrong with Manila’s use of SPS-IC as long as it is properly implemented.
SPS-IC is a document issued by the Philippines for incoming imports certified to be free from pests or diseases that could harm the country’s agriculture sector and even human health.
“The United States is concerned that the Philippines uses the SPS-ICs to restrict imports for reasons
that appear unrelated to the protection of human, animal, or plant life or health,” the United States in its communication to the committee meeting, a copy of which was obtained by the BusinessMirror.
The United States noted that the Philippines made numerous notifications of legislation and regulations concerning import licensing last year.
Citing the Philippines’s notifications, the US said Manila had explained that it uses SPS-ICs to “ensure that the products being imported meet the standards to protect human, animal life or health, guarantee that the products are safe for consumers and to prevent the spread of pests or diseases of animals” and are “not intended to restrict the quantity or value of imports.”
Domestic supply issue
However, Washington, citing the Philippines’s trade policy review in 2018, pointed out that in “some instances” concerned Philippine government agencies take into consideration current domestic supply when issuing SPS-ICs.
Washington also expressed concerns on “repeated public statements” made by the Department of Agriculture (DA) to use SPS-IC to “periodically block” imports of certain agricultural products during their respective domestic harvest seasons.
“We are specifically concerned by the repeated public statements by the Philippines Department of Agriculture [DA] that it is using the SPS-IC system to periodically block imports of rice, corn, and feed wheat during its domestic harvest seasons,” it said.
Washington disclosed that it has received “reports of ongoing SPS-IC rejections without reason since September 2020” for the importation of US whole chickens.
Industry sources confirmed to the BusinessMirror that the Bureau of Animal Industry (BAI) has stopped issuing SPS-IC for whole chickens since late last year without any reasons given to concerned parties.
“We know that the DA won’t issue SPS-ICs for whole chickens for whatever reasons,” Jesus C. Cham, President of the Meat Importers and Traders Association (MITA), told the BusinessMirror. “We questioned them and they just told us that there is a memorandum not to issue.”
BAI data obtained by the BusinessMirror showed that the last time the agency issued SPS-IC for importation of whole chickens was in June of last year.
Certain lawmakers and agriculture officials had argued last year over the issuance of SPS-IC for rice imports, as purchases of the staple from abroad depressed domestic prices in recent years.
For example, Senator Cynthia A. Villar has repeatedly asked the DA not to issue SPS-IC during harvest season to manage or even limit the importation of rice and thus avoid having an oversupply.
Bureau of Plant Industry (BPI) data obtained by the BusinessMirror showed there were certain months last year—such as in October and November—that it did not issue any SPS-IC for rice imports.
The BPI earlier told the BusinessMirror that it did not suspend the issuance of SPS-IC for rice imports and that it was “managing” the schedule of arrival “to prioritize the distribution of local palay/rice.”
Dar, Lopez
Sought for comment about the concerns raised by the United States, Agriculture Secretary William D. Dar told the BusinessMirror he wants to “see the document before commenting.”
For the Department of Trade and Industry (DTI), securing sanitary and phytosanitary import clearance (SPS-IC) permits for agriculture imports is “not necessarily” a trade barrier if being properly implemented.
DTI Secretary Lopez told the BusinessMirror that requiring SPS-IC permits for agriculture imports is a necessary measure despite the US tagging it as a trade barrier.
Lopez said that such permits “are needed non-tariff measures to ensure food safety and protect local industry from entry of plant and animal diseases.”
“It [SPS-IC permit] should be applied to the extent that it is necessary to protect human, animal and plant life and should not be used arbitrarily,” he said, noting that standards should be subject to science.
“It [SPS-IC permit] is not necessarily a trade barrier unless the measures are used unjustifiably,” he added.
In the 2021 National Trade Estimate Report on Foreign Trade Barriers by the US Trade Representative (USTR), it was noted that the US raised concerns about the SPS-IC permit requirement before the WTO during the Import Licensing Committee meeting and Committee on Agriculture meeting last year.
The US, in a WTO document dated April 7, also asked the Philippines to explain the rationale behind the SPS-IC system and to detail the underlying laws, regulations and guidelines supporting said requirement.
“This [SPS-IC permit] requirement adds costs, complicates the timing of exports, and prevents the rerouting to the Philippines of products intended for other markets but not sold there for commercial reasons,” the USTR said. “It also prevents an exporter from reselling an imported product if the importer refuses to accept delivery or abandons the shipment.”
USTR said the Philippines also did not issue SPS-IC permits for imported rice and horticultural products, such as US table grapes, chipping potatoes, feed wheat, whole birds and corn in 2019 and 2020.
Stakeholders, USTR noted, claimed that the often-cited reason for the non-issuance of SPS-IC permits appeared to be protection for “domestic producers from import competition,” instead of ensuring the products were safe for consumption.
Asked what has the government done in response, Lopez deferred to the DA.
In an earlier interview with the BusinessMirror, the Trade chief supported the removal of non-tariff barriers for imports and replacing them with an appropriate tariff instead. (Related story: https://businessmirror.com.ph/2021/04/22/lift-non-tariff-barriers-put-proper-tariff-dti/)
Lopez made the statement after the Economic Development Cluster (EDC) ordered both the DTI and DA to conduct a study should the minimum access volume (MAV) system be abolished while placing a proper tariff.
In an EDC meeting last month, Finance Secretary Carlos G. Dominguez III said in a letter on April 20 to Senate President Vicente Sotto III that the price uptick in the key commodities were because of “government tariffs, low MAV quotas and non-tariff barriers to trade.”
MAV refers to the certain volume of agricultural imports that are imposed with lower tariffs. In the Philippines, it covers rice, corn, pork, poultry meat, coffee and sugar.
Not first time
This was not the first time that the United States raised its concerns about the Philippines’s SPS-IC system at the WTO.
During the November meeting of the WTO Committee on Agriculture last year, the United States raised the issue after SPS-IC for feed wheat and whole chicken imports coming from the US were rejected by the Philippines; while the issuance of SPS-IC for US fresh fruits and vegetables was delayed.
“Under Article 4.2 of the Agreement on Agriculture, Members shall not maintain, resort to, or revert to any measures of the kind which have been required to be converted into ordinary customs duties, including quantitative import restrictions and discretionary import licensing,” the United States said.
The Philippines responded to the questions raised by the US during the November WTO COA meeting. “As an impact of the review of importer registrations considering reports of unfair trade practices and food safety requirements, the issuance of the SPS-IC was disrupted for rice and other commodities,” it said.