China-ASEAN FTA talks plow through farm goods

Negotiations create the world's largest free trade area combining China and ASEAN by 2010 are advancing, but the Philippines has raised concerns over agricultural tariffs, officials said yesterday.

Trade from the ASEAN met with Chinese officials in the Cambodian capital to hammer out an "early harvest" of mostly agricultural goods whose tariffs would be dismantled ahead of the planned free trade zone.

The ASEAN-China FTA is to create a market of 1.7 billion consumers with a combined gross domestic product of 2.0 trillion dollars and total trade of 1.23 trillion dollars.

China earlier said it was confident ASEAN tariffs would be brought down ahead of the FTA, with Beijing agreeing to cut tariffs on agricultural imports from the region to zero by next year.

But Philippine Trade Secretary Manuel Roxas said the "early harvest" plan may not work well for his country, an archipelago whose main source of export receipts is electronics.

"The Philippines expressed its continuing concern over the elements of the early harvest program," Roxas told reporters after closed door ASEAN-China consultations in Pnomh Penh.

"We acknowledge China's desire to be helpful to provide the early harvest as an inducement [for trade] for ASEAN countries. However, our current analysis is that it is not very helpful to the Philippines because of [certain] circumstances or particulars."

He noted that the early harvest plan covered mostly agricultural goods, but the Philippines "does not have a very large central plain" or a river system similar to the Mekong delta that helps in boosting agriculural production.

"We have to build all ouf our irrigation infrastructure, so we are not as efficient in agriculture as the other countries are," Roxas said.

Roxas expressed concern about tariff reductions between China and the Philippines.

While Philippine tariffs on Chinese goods have been trimmed to between zero and five percent, China has only granted the same level of tariffs for less than 10 percent of goods from the Philippines, he said.

"If that is our starting point for the early years of the reduction program, they would always have a tariff regime higher than ours," Roxas said.

The Philippines however remains committed as a member of ASEAN to push forward with the free trade plan.