DA cautious on US trade deal’s impact on local agriculture

The Department of Agriculture (DA) is taking a cautious stance on the recently concluded US-Philippines trade agreement, as Secretary Francisco Tiu Laurel Jr. said Wednesday that it remains too early to assess its implications for Philippine agricultural exports and rural producers.

Under the new trade arrangement, the Philippines has agreed to lift tariffs on American goods entering the country, while Philippine exports to the US will face a 19 percent tariff – an uptick from the initially proposed 17 percent, but lower than the 20 percent rate earlier floated by the White House.

“Whether the Philippine agriculture sector will gain or not from this trade deal with the US remains to be seen, especially as many of our competitors are still negotiating for better terms,” Secretary Tiu Laurel said.

The DA is particularly concerned about how the zero-tariff entry of US agricultural products – especially feed grains and cereals – may affect domestic producers and supply chains.

While lower import costs could benefit livestock and poultry growers by reducing production inputs, the department is also evaluating potential displacement effects on local corn farmers and feed producers.

Secretary Tiu Laurel said the DA would closely monitor import volumes and price movements in the coming months to determine the actual market behavior following the implementation of the deal.

The US has already lowered tariffs on Indonesian goods to 19 percent from 32 percent, while Vietnam secured a 20 percent rate – significantly lower than its earlier proposed 46 percent. Meanwhile, Thailand and Cambodia remain in talks, with a proposed 36 percent tariff still on the table.

Despite a USD3.98 billion overall trade surplus with the US in 2024, the Philippines recorded a USD1.95 billion agricultural trade deficit, though it narrowed from USD2.36 billion in 2023.

The country’s top agricultural export to the US last year was coconut oil, which brought in USD558.7 million. On the import side, key US agricultural goods included animal feeds (USD1.36 billion), cereals (USD838.1 million), and other food and live animals (USD384.1 million).

The DA said it sees potential benefits from cheaper US agricultural imports, especially in achieving President Ferdinand Marcos Jr.’s food security goals. Lower feed and cereal costs may help reduce farm input prices and stabilize local meat and poultry supply.

Still, the department is urging caution, emphasizing the need for safeguards to ensure that local producers – especially smallholder farmers – are not left at a disadvantage in the face of greater competition.