Group protests DTI stand on safeguard measure

Published B8 on the March 28, 2007 issue of The Philippine Star

The multisectoral Fair Trade Alliance (FairTrade) is protesting the decision of the Department of Trade and Industry (DTI) not to impose a definitive safeguard on imported sodium tripolyphosphates (STPP) from neighboring countries, mainly China.

STPP is an ingredient used for making laundry detergents. STPP comprises approximately 20-28 percent of detergent powders and 3-12 percent of detergent bars.

Wigberto Tañada, lead convenor of FairTrade said, “The ruling of the DTI is a huge blow to the local STPP industry which has been severely devastated by the unwarranted deluge of imported STPP to the domestic market. This is definitely a death-knell for the domestic industry.”

The petition of CAWC, Inc., the local manufacturer of STPP, for a definitive safeguard has been dismissed by the DTI which overruled the recommendation by the Tariff Commission (TC) to impose the safeguard. TC established a causal link between the increased imports of STPP and the serious industry to the domestic industry.

“The Safeguards Law has been enacted by Congress to defend local industries and agriculture against dumped and subsidized imports that threaten to destroy the viability of these industries. Further, the World Trade Organization allows these flexibilities under its rules. Remember this is part of the safety nets promised to the industries when we joined the WTO. That is why we are greatly puzzled by this sudden policy reversal of the DTI. What is the logic?” asked Tañada.

The United States, the European Union, Japan and other developed countries, including India, China and Thailand, when faced with similar problems involving dumping and import surge do not hesitate in imposing safeguard tariffs or even imposing an outright ban on importation in the name of protecting their own industries and jobs against unfair trade and unfair competition.

The Tariff Commission, in its report, said that STPP imports, in 2005, captured 65% of the market and took over the market leadership from the domestic industry leaving the latter with a record low of 35% share of the market. The report cited the decline in the market share of the domestic industry is directly attributable to the significant increase in imported STPP in 2005. The surge of imports resulted to a very low sales volume and 23 per cent capacity utilization resulting in layoffs and a continuing shutdown.

“We therefore urge Secretary Favila to remain consistent with its earlier position and stand by the recommendation of the Tariff Commission. The decision of the Tariff Commission is a win-win situation: it will provide breathing space for the local industry, impede the entry of dumped and subsidized STPP imports, and keep prices of detergents stable.” Tanada said.

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
Howl raised over DTI junking of tariff cover on soap input

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