Howl raised over DTI junking of tariff cover on soap input

By Ayen Infante
Published online on the March 17, 2007 issue of The Daily Tribune

Local manufacturers were taken aback by a Department of Trade and Industry (DTI) decision dismissing a petition to impose punitive tariff on a key ingredient in soap and detergent production despite Tariff Commission findings supporting safeguard measures on the product.

The local manufacturing industry of sodium tripolyphosphates (STPP) expressed surprise over the recent DTI move dismissing their petition for a safeguard measure.

“After a formal investigation, the Tariff Commission recom-mended to the DTI the imposition of the definitive general safeguard measure in the form of tariff rate quota and specific duty based on the provisions of Republic Act 8800 and the WTO Agreement on Safeguards,” said Deeda Garcia-Verzosa, chief operating officer of the Chemphil Group.

Verzosa said during the hearings before the Tariff Commission, the local STPP manufacturing industry established that the long-term public interest will not be sacrificed with the application of the safeguard measure. She added that it will not cause any political or economic crisis or the shortage of the local product.

The Fair Trade Alliance (FTA) also urged DTI to exercise fairness in the implementation of safeguard measures against imports following the alleged dismissal of the DTI of the application filed by CAWC Inc., a local manufacturer of STTP-TG (Sodium Tripolyphosphate-technical grade ), an important substance in making detergents.

“We were shocked that DTI has now completely reversed its original position through the new DTI order dismissing the definitive safeguards on STPP imports,” the FTA said.

The Tariff Commission, in its report, said STPP imports, in 2005, captured 65 percent of the market and took over the market leadership from the domestic industry leaving the latter with a record low of 35 percent share of the market.

The preliminary investigation in 2006, where all the stakeholders (CAWC INC., detergents sector, consumer, labor, industry associations and representatives of embassies of countries exporting STPP to the Philippines ) were present.

“DTI Secretary Peter Favila said there was sufficient basis to provide the company the safeguard measure. We supported his action and hailed his decisiveness to grant CAWC INC. provisional safeguards for 200 days, as a temporary counter against illegal and unfair trade practices.”

As required under the Safeguards Law (RA 8800), the Tariff Commission conducted hearings and investigation on this case. Again, all stakeholders were given time to present their respective sides. Ultimately, the Tariff Commission made a positive final determination favoring CAWC a definitive general safeguard for three years.

The only way CAWC — and other companies in the Philippines — can survive is through the “equalization” of the business playing field for the locals and the application of these safeguard measures against unwarranted and unfair flooding of our domestic market with goods being dumped by other countries.

“As you know, many of our domestic industries, including agriculture, are operating with huge handicaps — lower tariffs due to that one-sided unilateral tariff reduction program implemented in the l980s-1990s, and a relatively higher cost of doing business.”

These handicaps are further aggravated by the inability of our own government to stop smuggling and impose safeguards when called for, like what the United States , the European Union, Japan and other developed countries, including India , China and Thailand when faced with similar problems. The said countries do not hesitate to impose safeguard tariffs or even impose an outright ban on importation in the name of protecting their own industries and jobs against unfair trade and unfair competition.

“This is exactly what President George Bush did a few years ago when he imposed immediately and almost automatically a 30 per cent safeguard tariff against Russian and Korean steel, when he slapped Chinese and Vietnamese shrimps with 100-105 per cent safeguard tariffs the other year, and more recently, when he imposed a 55 per cent tariff on Brazilian sugar ethanol.

“We therefore urge DTI to remain consistent with its earlier position and stand by the recommendation of the Tariff Commission.

She reiterated that the continued viability of the local STPP industry through the safeguard measure is paramount in protecting the domestic supply-chain.

Verzosa warned that without the safeguard measure, “foreign suppliers have the unhampered opportunity to take advantage of the situation and manipulate the price of STPP thereby rendering each and every Filipino helpless. tincreases in soap and detergent products.”

Tariff Commission’s Formal Investigation Report on Sodium Tripolyphosphates (STPP)
FairTrade urges DTI to reverse ruling on STPP safeguard
Cheaper soaps is good for public

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