Fewer countries exempted from safeguard duties on car imports — Trade dep’t

FEWER COUNTRIES will be exempt from duties placed on car imports after the government reassessed its developing economy classifications to comply with international rules, the Department of Trade and Industry (DTI) said.

In department administrative order 21-01 published on Tuesday, the DTI said that it must follow an agreement with the World Trade Organization (WTO) to exclude developing countries with minimal or insignificant import volume from safeguard measures.

But it also said that developing economies are further classified in a low to lower middle-income spectrum and have low to high human development. It added that members of the Organization for Economic Cooperation and Development (OECD) are mainly high-income economies.

The DTI had slapped provisional safeguards in the form of cash bonds of P70,000 per passenger car and P110,000 per light commercial vehicles from various countries after it found a link between a surge in imports and a decline in local employment.

The Safeguard Measures Act, or Republic Act No. 8800, allows domestic producers to ask the government to conduct an investigation into their import competitors if they claim to have been injured by excessive imports.

The DTI amended the annexes of its department order 20-11 prescribing safeguard measures, reducing the exempted economies. European and Central Asian countries on which passenger car safeguards will not apply, for example, was reduced to 23 economies from the previous 31 after countries like Hungary and Poland were removed from the list.

In the Middle East, Israel was removed from the list, while Chile was removed among countries in the Americas. Both are OECD members.

The WTO said that it has no official definition of “developed” and “developing” countries among its members,

“Members announce for themselves whether they are ‘developed’ or ‘developing’ countries,” the WTO website says. “However, other members can challenge the decision of a member to make use of provisions available to developing countries.”

Around two-thirds of WTO members identify themselves as “developing.” Other members can challenge a member’s decision to make use of a trade provision for developing countries.

The duties are being applied for 200 days while the Tariff Commission conducts its own investigation.

The legal representatives of industry groups and firms affected by the duties at a conference with the commission have been questioning the validity of the petition for safeguards from Philippine Metalworkers Alliance and the group’s ability to represent the local industry after domestic manufacturers opposed the duties.

DTI based its investigation on the alliance’s petition and imposed duties to protect local jobs. —