Bangkok, Oct 19 - Rice-exporter Thailand threatened to delay an ASEAN free trade agreement unless it can get a "fair deal" on tariffs from the Philippines, the world's biggest buyer of the food staple, Thai officials said on Monday.
The 10 members of the Association of Southeast Asian Nations -- of which Thailand and the Philippines are members -- are due to ratify an ASEAN Trade in Goods Agreement (ATIGA) at their summit in Thailand this week. The trade pact is among the steps that ASEAN, with a combined population of 540 million, is taking towards becoming an EU-style grouping.
"Thailand will make its final proposal at the ASEAN summit meeting this weekend that it would not ratify the ATIGA pact if it cannot get fair deals from the Philippines on the rice issue," a senior Commerce Ministry official told Reuters.
Thai Commerce Minister Porntiva Nakasai was quoted as saying in a local newspaper that Thailand could not accept the Philippines' offer to compensate for its delay in cutting tariffs on rice imports by giving Thailand an annual tariff-free rice import quota, saying the amount was too small.
According to the ASEAN free trade pact, Philippine rice import tariffs should be cut to 20 percent from 40 percent by Jan. 1, 2010.
But Manila is insisting that rice is classified under a "highly sensitive list" that allows import tariffs to stay at 35 percent.
The Philippines is proposing to give Thailand a quota of 50,000 tonnes of tariff-free rice annually to compensate for not meeting the tariff target, while Thailand has demanded 360,000 tonnes, another senior Commerce Ministry official said.
Trade ministers from the two countries need to try to resolve the dispute during the ASEAN summit this weekend at Thailand's beach town of Hua Hin, the official said.
"It depends on the policy-makers whether they want ASEAN to move on, or to be such a less progressive trade cooperation," he said.
Thailand, the world's biggest rice exporter, exported 10 million tonnes of rice in 2008 of which 599,677 tonnes went to the Philippines, the world's biggest rice importer, according to Thailand's Commerce Ministry data.
From January to August 2009, Manila bought 116,322 tonnes of rice from Thailand, mostly premium grade for high-end restaurants. Vietnam has mainly snatched the market for lower quality rice grades by offering better prices, traders said.