Rice smuggling, WTO and Philippine law

At the hearing on rice smuggling at the Senate last Jan. 22, some senators stated that whether rice smuggling exists or not depends on whether we will follow Philippine Law or the World Trade Organization (WTO).

As we wait for the answer, the Bureau of Customs (BOC) declared that it would release the seized rice shipments because of injunctions from three courts in Davao, Batangas and Manila ordering it to do so.

These injunctions were based on a WTO document that states that Philippine rice import restrictions expired on June 30, 2012. Therefore, all rice shipped to the Philippines after this date do not need import permits and, consequently, are not smuggled.

We will argue here that this is a misguided understanding of WTO. There is no contradiction between our WTO commitment and Philippine law. I know this because of my background as former DTI and DA undersecretary, presidential flagship secretary under the Office of the President, and vice president for Asia of the United Nations Conference on Trade and Development (UNCTAD).

WTO

It is necessary to understand WTO. I will quote here direct statements from the WTO website (www.wto.org). WTO has given us the flexibility to extend this deadline. We have done so, and the import restrictions are now in effect. The 2,000 smuggled rice containers seized by BOC are therefore smuggled. This should not be released back to the smugglers, as what is happening today.

The website states: “WTO is a rules-based, member-driven organization—all decisions are made by the member-governments, and the rules are the outcome of negotiations among members.” There is a special section in WTO called the “Agreement on Agriculture.” It states that this agreement “allows some flexibility in the way commitments are implemented.” How is this done?

The topmost WTO decision-making body is the Ministerial Conference. This “can take decisions on all matters under any of the multilateral trade agreements.” As a private sector agricultural representative of the Philippine delegation to a previous WTO Ministerial Conference held in Hong Kong, I witnessed this firsthand. The most recent one occurred last December 2013 in Bali, Indonesia.

Bali Package

The Ministers “adopted the Bali Package, a series of decisions made at streamlining trade, allowing developing countries more options for providing food security, boosting least developed countries’ trade, and helping development more generally.”

Following the WTO objectives of food security and development, the Philippines notified the WTO that it was extending rice import restrictions beyond the 2012 deadline. We exercised our negotiating flexibility to extend this to 2017. Our official negotiations are now going on. At the Bali Conference, this was recognized. There were no objections made.

Therefore, the import restrictions mandated by Philippine Law currently implemented by the BOC do not in any way contradict WTO. Perhaps, some misguided elements should consult the WTO website, which records the WTO Bali Ministerial Conference agreements to understand this better.

In addition, for us to lift rice import restrictions, a WTO member should bring this issue to WTO Dispute Settlement, secure a decision against our stand, and wait until we amend our law to conform to this decision. Not even one of these three steps has occurred. It is therefore very clear that rice import restrictions in the Philippines fully recognized and accepted by WTO are in effect today. There is no contradiction between WTO and Philippine Law.

Since the three courts that ordered the injunctions may not be aware of this, they should attend immediately to the Solicitor General’s Motions for Reconsideration. The BOC should stop releasing these seized smuggled rice containers, which is making a mockery of the anti-smuggling drive. More importantly, this release that we are witnessing today loses government revenues, endangers our food security, damages the livelihood of three million rice farmers, and puts in reverse mode the inclusive growth strategy of our government.

Competence

“Kung walang corrupt, walang mahirap.” Many rice farmers believe that much corruption has entered both the executive and legislative branches of the government. But in addition to fighting this corruption, the farmers contend that government should increase significantly its competence in dealing with issues such as rice smuggling.

Already, our farmer leaders have submitted documented charges to the Supreme Court and the Ombudsman to protest this travesty of justice shown by the release of smuggled rice shipments back to the smugglers. With increased government competence, it should no longer be necessary for poor farmers to risk their safety and meager resources in fighting for what should have been given them if government competence were at the desired level.

(The author is chair of Agriwatch, former secretary for presidential flagship programs and projects, and former undersecretary for agriculture, trade and industry. For inquiries and suggestions, e-mail [email protected] or telefax (02) 8522112.)