Economic managers pitch for lowering of non-tariff barriers
Economic managers have proposed to President Duterte the lowering of nontariff barriers and loosening of restrictions on the importation of several food items in place of lowering tariffs to curb inflationary pressures, the National Economic and Development Authority (NEDA) said.
Socioeconomic Planning Secretary and NEDA chief Ernesto Pernia said this was among the matters discussed during the meeting of the Economic Development Cluster (EDC) last Wednesday.
During its meeting, the Committee on Tariff and Related Matters (CTRM)— chaired by the Department of Trade and Industry and cochaired by NEDA—rejected the proposal to lower duties on imports of agricultural products such as meat, fish, vegetables, feed wheat and corn.
The committee said reducing tariff rates on these products would not significantly arrest the rise in consumer prices as farm products are already imported at most favored nation (MFN) rates as provided for under free trade agreements with trade partners.
Per CTRM estimates growth in inflation would only ease between 0.03 percent to 0.45 percentage point by cutting tariffs on several food stuff.
Instead of further lowering tariffs, NEDA said the committee agreed on the lowering of several non-tariff barriers essentially by lessening the number of bureaucratic procedures and easing restrictions on the importation volume of agricultural products.
“So what the committee proposed was taking out nontariff barriers. There are limitations on the importation of certain products like fish, sugar, corn. So these would be eased to free up importation,” said Pernia.
NEDA Undersecretary Rosemarie Edillon said among those considered is the relaxation of the special safeguard duty (SSG) on farm products. An SSG is essentially an additional tariff imposed an agricultural commodities, the purpose of which is to allow free trade but preventing foreign competitors from undercutting prices charged in the domestic market.
“We are talking about the SSG. It’s a set of regulations that may be relaxed,” said Edillon.
She said by easing nontariff barriers, the government would make it easier for importers to boost domestic supply to drive down prices.
“We will have less bureaucratic procedures,” she said.
She also noted that this scheme would be easier to implement since relaxing non-tariff barriers is already within the scope of power of the agriculture and trade departments.
“The DA and the DTI already have authority. It can be facilitated by department orders,” she said, noting Agriculture Secretary Emmanuel Piñol committed to its implementation.
“The way to go really is trade facilitation So that is easier. You don’t need to get an executive order, it’s faster,” she added.
Pernia said the CTRM has already submitted its recommendation to Malacañang, which has so far not opposed the proposal.
“We have submitted our recommendation and according to (Palace spokesman Harry) Roque, it is fine with Malacanang. It was also agreed upon by the economic mangers,” he said.
Other than NEDA and DTI, the committee is composed of the secretaries of agriculture, budget and management, labor, agrarian reform, finance, foreign affairs, and environment and natural resources. It also includes the governor of the Bangko Sentral, executive secretary and the chair of the tariff commission.