Archive for the ‘Safeguard Measures’ Category

Chemphil, the company which FairTrade supported on its safeguard petition and the country’s lone manufacturer of a local soap detergent ingredient, have reached an agreement with the soap manufacturers to continue its business even without the reimposition of safeguard provisions.

In a report by Paul C.H. How of BusinessWorld:

In a memorandum of agreement signed yesterday, the Soap and Detergent Association of the Philippines (SDAP), through President James M. Lafferty, who is also president of Procter & Gamble Philippines, Inc., committed to provide financial assistance to Chemphil Albright & Wilson Corp., represented by its Chief Operating Officer Alexandra Garcia-Versoza.

Chemphil, for its part, will work on getting back on its feet after having contemplated closing down at the end of May due to the removal of tariffs on sodium tripolyphosphate (STPP), the production of which has been more expensive by $150 per metric ton than the same component imported from China without safeguards.

“The industry will begin to resupply [from Chemphil] at competitive prices and help them become competitive. They [Chemphil] need to invest in certain fuel systems in their factory, and also develop alternative uses for their equipment. They can diversify their portfolio. We will help them either get financing or outright [provide] grants of money,” Mr. Lafferty told reporters.

The investment of the money, he added, will allow the STPP supplier to bring prices down and become globally competitive.

Regarding Chemphil’s petition to DTI to reverse its ruling on STPP safeguards:

Ms. Alexandra Garcia-Versoza said that, with the signing Chemphil will be withdrawing its petition with the Trade department asking for the restoration of tariff charges of P14,150 per metric ton on STPP, which were lifted last February.

The Trade department had dismissed last March Chemphil’s petition to remove the tariffs, and ordered the refund of cash bonds that had been imposed on importations from July 2006 till then. The state had previously imposed the P14.15-per-kilogram cash bond on the STPP importations for 200 days beginning last July.

The company then filed for reconsideration, saying the removal of the safeguards was allegedly in favor of China-imported STPP.

Chemphil, manufacturers settle dispute on soap ingredient
Various FairTrade articles and resources on the issue of Chemphil and safeguards

Advertisements

New *ppoint downloads taken from Fair Trade Alliance (FairTrade) and Philippine Employer-Labor Social Partnership, Inc. (PELSPI)’s forum on safeguards entitled: “The Missing Nets: Safeguards for Industry and Agriculture,” held last May 3 at the Conrado Benitez Hall, PRRM Building, Mo. Ignacia Ave. cor. Dr. Lazcano St., Quezon City.

Forum program
Various FairTrade articles and resources on safeguards
Forum on safeguards: The Missing Nets (Safeguards for Industry and Agriculture)

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

HON. PETER FAVILA
Secretary
Department of Trade and Industry

Mr. Secretary:

Since the l990s, one Philippine industry after another has been collapsing – shoes, textiles, rubber, onion, garlic, etc. All this due to unbridled economic liberalization, weak government-industry coordination to meet global competition and national indecisiveness in dealing with smuggling, foreign dumping and unfair trade practices of other countries.

Today, CAWC, Inc., a Filipino producer of STPP (sodium tripolyphosphates), a detergent ingredient, is facing a life-and-death struggle to survive under the most unfair trade environment. Because of the rising flood of dumped and subsidized STPP imports, CAWC has been incurring massive losses, which rose from P33 million in 2003 to P135 million in 2005, while multinational detergent companies have been registering net incomes of approximately P2 billion a year. There has been a surge of STPP imports, from 3,000 metric tons in 2001 to 20,210 MTs in 2005, or an increase of 700 per cent, cornering 65 per cent of the domestic STPP market from almost zero in the l990s. This is why your office originally granted a provisional safeguard. In fact, the DTI report concluded, “The application of the safeguard measure will not be an additional burden to consumers contrary to allegations.” Additionally, “there is no clear indication that imposition of safeguard measures will create a political or economic crisis. The impact of the said measure on the consuming public will be negligible.” (DTI Report, SGM Case No. 1-2006, 06 July 2006). Subsequently, the Tariff Commission, after a series of hearings, recommended a definitive safeguard to counter this STPP foreign dumping, coming mainly from China.

Hence, Mr. Secretary, we are greatly puzzled by your policy somersault, reversing the earlier position taken by DTI and contradicting the findings of the Tariff Commission! What is the logic behind your decision declaring the safeguard tariff measure as injurious to public interest? Are we sacrificing another Philippine industry in the name of unbridled economic liberalization? Are we supporting the creation of jobs in other countries?

Mahal na Kalihim, mangyari lamang pong pakiwasto ang ating patakaran.

Fair Trade Alliance (FairTrade)
Federation of Philippine Industries (FPI)
Citizens’ Alliance for Consumer Power (CACP)
PEACE Foundation / UNORKA
Samahan ng Magsasapatos sa Pilipinas (SMP)
Labor Alliance for Better Order and Reforms (LABOR)
Garments, Textiles and Allied Industry Labor Council (GARTEX)
National Confederation of Labor (NCL)
Association of Democratic Labor Organization (ADLO)
Katipunan ng mga Samahang Manggagawa (KASAMA)
Unified Filipino Service Workers (UFSW)
Filipinong Samahang Manggagawa (FSM)
National Union of Bank Employees (NUBE)
Philippine Employer-Labor Social Partnership, Inc. (PELSPI)
Alliance of Concerned Teachers (ACT)
Samahang Demokratiko ng Kabataan, Inc.

—————————

Published in the Philippine Daily Inquirer and the Philippine Star, Page 8, March 28, 2007.

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

The labor sector of the Fair Trade Alliance (FairTrade) questions the decision the Department of Trade and Industry (DTI) not to grant the definitive safeguard to the petitioner, CAWC Inc., a manufacturer of Sodium Tripolyphosphates (STPP), even after the Tariff Commission found sufficient cause for granting it.

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

In its decision, the DTI reversed the ruling of the Tariff Commission to give a three-year definitive safeguard to CAWC. DTI completely disregarded the finding of Tariff Commission, which has established the existence of a causal link between the increased imports of STPP and the serious industry to the domestic STPP industry.

“We therefore urge Secretary Favila to stand by the findings of the Tariff Commission which was done in a scientific manner. This decision of Tariff Commission does not violate existing laws. In fact, it is well within Philippine Safeguard Law (RA8800) and the rules of the World Trade Organization”, emphasized Fair Trade labor convenor Angelito Mendoza.

Mendoza said, “The imposition of a safeguard is just and fair, given the predatory behavior of the importers-exporters involved in the dumping of Chinese STPP into the domestic market and given the now comatose state of the domestic STPP industry.”

The Tariff Commission report said that STPP imports in 2005 cornered 65% of the market from a low of 20-30 percent in the previous years. Furthermore, according to the report, the decline in the market share of the domestic industry is directly attributable to the significant increase in imported STPP in 2005.

The deluge of imports resulted in less than 25% capacity utilization of the local STPP industry resulting in job losses and a continuing shut down since 2005. “Clearly, the local STPP industry, most especially its workers, needs the safeguard in order to preserve their existing jobs.” Mendoza said.

“The only way for CAWC to survive is by ‘equalizing’ the business playing field for the locals – through the imposition of the definitive safeguard tariff against importers who seem to have the habit of breaking all the rules of fair trade.

“Iilan na lang ang industriya sa Pilipinas. Hahayaan ba nating tumumba ang isa na naman, na nagkataong isang basic industry? Papayagan ba natin na maging dumping ground na lamang ang Pilipinas ng produkto ng ibang bayang ayaw sumunod sa fair trade rules?, Mendoza added.

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

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

It has come to our attention that the application of the definitive safeguard on imported STPP-TG (Sodium Tri-polyphosphates) which was filed by CAWC, Inc., a local manufacturer of the same product, has been dismissed by your office.We are saddened by this turn of events. The Fair Trade Alliance (FairTrade) has always fought, alongside with our domestic producers, for the flexibilities they deserve under our laws and World Trade Organization (WTO) rules. Public and national interests dictate that we give industry the safety nets promised by the government in 1994-95, when we joined the WTO, and already provided by our existing safeguard laws, to enable them to compete and remain operationally viable against the unfair trade practices of other nations and sectors such as smuggling, dumping and subsidies. Of course, within the time that safeguards are in effect, we expect industries to use the safeguard period to adopt the necessary adjustment measures to become competitive in a regime of low tariffs.

In this case, FairTrade supported the 2006 safeguard petition of CAWC, INC., to give them breathing space amid the suffocating surge of STPP imports, coming mainly from China. In fact, 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 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, the DTI said there was sufficient basis to provide the company the safeguard measure. We supported DTI’s action and hailed DTI’s 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, INC. a definitive general safeguard for three years.

We were therefore shocked that DTI has now completely reversed its original position thru the new DTI order dismissing the definitive safeguards on STPP imports.

Mr. Secretary, the only way CAWC, INC. – 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.

Papayagan ba natin na maging dumping ground na lamang ang Pilipinas ng produkto ng ibang bayan na ayaw sumunod sa fair trade rules at fair competition?

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

—————————

* Submitted to the Department of Trade and Industry, Office of the President and Tariff Commission dated March 15, 2007.

Safeguards and the National Interest

In 1997, the Supreme Court, in Tañada vs. Angara, upheld the accession of the Philippines to the WTO by promising that local industries can rely on safety nets such as safeguard measures to protect itself from unfair foreign competition: “GATT itself has provided built-in protection from unfair foreign competition and trade practices including anti-dumping measures, countervailing measures and safeguards against import surges. Where local business is jeopardized by unfair competition, the Philippines can avail of these measures.”

However, eight years later, the Supreme Court has come out with two decisions that rendered the Safeguard Measures Act (RA 8800), that provides agricultural and industrial producers temporary relief against unfair trade practices of other nations, useless, ineffective, if not unconstitutional.

On the first decision involving the local cement industry, the Supreme Court emasculated RA 8800 by stripping both the Department of Trade and Industry (DTI) and Department of Agriculture (DA) off their powers imposed to counter import surges threatening the viability of agriculture and industry.

On the second decision involving the local industry, the Supreme Court, in effect rendered RA 8800 unconstitutional when it affirmed a writ of preliminary injunction issued by a local court restraining the implementation agencies of RA 8800 (DTI, DA, Department of Finance, Bureau of Customs) from enforcing the said Safeguards Law.

These decisions, if not reversed, will leave our farmers, our vegetable, onion and garlic growers, poultry and livestock producers, fisherfolks, shoe, cement, glass, ceramic tile manufacturers or the whole economy literally defenseless, unprotected and powerless in this era of unbridled liberalization.

Consider the following:

One, There are 5,000 direct workers and 115,000 indirect workers in the cement industry. Taxes paid by workers of the domestic cement industry to the government amounted to P230 million in 2000. Without the safeguard measures, these would be drastically reduced.

Two, the ceramic tiles has a total of 2,100 direct employees and 10,000 upstream and downstream employees. In 2001, it paid P279.5 million in taxes to local and national coffers and provided income to workers worth P579.8 million. Their economic contribution to the nation’s economy would be seriously eroded by this SC decision.

Three, the 65,300 workers of the glass industry in the downstream would also be endangered.

Four, the 300,000 workers from upstream to downstream footwear industry including the tannery industry would also be affected by the removal of the safeguard measures.

Fifth, the vegetable industry has 400,000 farmers in the Cordilleras, not to mention those in other regions would be severely affected with this recent SC decision.

Sixth, the Pulp and Paper industry directly provides 8,000 workers with jobs and it is also a source of livelihood for more than 10,000 people. They would also be endangered.

In the light of the above and the many other industries that are similarly situated, we, at the Fair Trade Alliance, call for the reversal of the two SC decisions rendering ineffective and virtually unconstitutional the Safeguards Law.

The implications of these decisions are indeed great and alarming. It will go directly against on our right as a nation and as a people to determine our own development agenda in accordance with our nationalist framework and spirit laid down in our Constitution that “the State shall develop a self-reliant and independent national economy effectively controlled by Filipinos” and that “the State shall promote the preferential use of Filipino labor, domestic materials and locally produced goods and adopt measures that help make them competitive” (Section 19 Article 2 and Section 12 Article 12, Philippine Constitution).

Sad to state, some judges and justices do not really know where our national interests lie and what is our common good.

The issue of safeguards is an issue crucial to all domestic producers. A safeguard measure is a globally-recognized safety net. It has become essential for the survival of Philippine industries. For our domestic industries to remain going concerns under globalization, they need to modernize by investing on new technology, skills and capacities, for this is the only way they can beat the cheap labor and subsidies of other countries. Without the safeguards, the industry has little incentive to sustain ongoing modernization.

Inexplicably, it has been even argued that the imposition of safeguard measures would be violative of our WTO commitments. On the contrary, WTO allows countries to use safeguard measures, as what US did when it imposed safeguard tariffs of steel and shrimp imports to protect their own industries. Even developing countries like India, Argentina and Ecuador use it against import surges so that their industries can survive the onslaught of imports. There is no reason why we cannot avail of safeguards for ourselves, to protect our own industries.

Liberalizing agriculture, industry, and services without the proper infrastructure and support systems to make them strong and competitive locally and globally will injure and destroy these sectors. With a terribly high cost of doing business in the Philippines, safety nets are important to at least level the playing field and counter unfair trade practices.

In this era of intense globalization and trade liberalization, where every country is protecting their own national self-interests, the interest of their local farmers and industry, Philippines on the other hand, instead of implementing and strengthening our own domestic laws, regulations and economic policies that will help sustain the viability and sustainability of our industries and agriculture is doing the opposite.

To survive global and regional competition, our industries need all the assistance the government can give vis-à-vis industries of other countries which do not hesitate to provide their own industries credit, technology, marketing and other forms of assistance, including safeguard measures. The SC twin decision will decimate and destroy Philippine industries, agriculture, jobs and livelihoods of Filipino workers and farmers, and ultimately the consumers as well. Without adequate safeguard measures, our sizable domestic market will continue to be a prime target for cheap imports and outright dumping.

We therefore welcome the decision of both Secretaries of Department of Trade and Industry and the Department of Agriculture to file a motion for reconsideration of this said Supreme Court decision.

We, at the Fair Trade Alliance, are not advocating for opportunistic protectionism. We are advocating for fair and just trade not only for the Philippines but for all countries. The imposition of safeguard remedy for our local industries is clearly impressed with national interest. It is vital to the sustainable growth of the Philippine national economy the fruits and benefits from which will be enjoyed by most, if not all, of our people.

 
Wigberto E. Tañada, Lead Convenor

Isang maalab na pagbati sa kaguruan at mga mag-aaral.  Gayundin  sa mga kaibigan sa civil society movement.  Nagpupugay din po ako sa lahat ng kababaihang naririto at nakikibaka para sa makatarungang kalakalan at makatarungang ugnayan sa buhay.   Indeed, the struggle for fair and just trade is also a struggle for fairness and justice in other spheres of social life, including the relations between men and women and those between the governed and those seeking to govern.

Ngayon, narito po tayo para pag-usapan ang ilang mahahalagang usaping pangkabuhayan at pangkalakalan na natabunan ng mga usaping pampulitika. Mahalagang malaman natin kung papaano mareresolba ang krisis sa pulitika.  Kung sino nga ba ang mamumuno sa bansa.

Subalit huwag nating kalimutan – magbago man o hindi ang Administrasyon, nahaharap ang ating bayan sa isang malalim na krisis pangkabuhayan. Limang milyong walang trabaho. Anim na milyong alanganin ang trabaho. Mahigit sa 50 porsiyento ng mga pamilya ang naghihirap.  Kinse (15) porsyento ng mamamayan ay dumaranas ng gutom.  At marami ng mga pabrika at negosyo kundi man nagsara ay nagbawas ng trabaho.

We are in a period of deep political and economic crisis. So much uncertainty and instability surround our society.

It is clear that the political crisis hounding the nation today is deeply intertwined with our economic crisis. In fact the economic crisis is fueling the political crisis, and to a great extent, vice versa.
My friends, with your permission, let me now discuss two disturbing developments which I think require a decisive response from all of us.

Our disappearing safety nets

The first development is related to our disappearing safety nets.

As a backgrounder, in the 1994 Senate debates on whether we should join or not the WTO, I took the position that we needed more time as our industry, agriculture and the economy in general were not yet competitive and thus not ready for fuller economic liberalization.  Ang sagot po ng Senate majority, kasama na ang kasalukuyang Pangulo ng bansa, ay huwag kayong mag-alaala. May safety nets para sa mga manggagawang mawawalan ng trabaho.  May training at livelihood programs para sa kanila.  May safety nets para sa mga magsasakang apektado ng imports.  May government assistance para sa agricultural modernization, marketing ng mga produkto sa sakahan at iba pa.  At may safety nets para sa industrial at iba pang producers.  Maglalabas ng batas laban sa biglang pagdagsa ng mga imports (o safeguards law against import surges), batas laban sa pagtatapon sa ating palengke ng labis na  kalakal ng ibang bansa (o anti-dumping law), at batas laban sa subsidized imports galling sa mga developed countries  (o countervailing duty law).

Now where are these safety nets?  What is their status?

Yong mga safety nets para sa trabaho, training at livelihood ng mga displaced workers, nakasulat po pala sa tubig —  sapagkat wala naming badyet.   Gayundin din ang safety nets para sa mga magsasaka.  Minsan nga, para lamang may maireport, isinama ng budget secretary ni Ramos ang mga flyovers sa EDSA na kabilang sa safety nets sa agrikultura.

Kaya, ang tanging safety nets na naiwan ay ang mga batas laban sa import surges (safeguards), dumping at countervailing duties.  Mga batas na naipasa limang taon pagkatapos ng ratipikasyon ng WTO.

Our affiliates in industry and agriculture have exerted efforts to get protection from  these   safety net laws, mainly the Safeguard Measures Act or RA 8800.  These laws are meant to level the playing field against the unfair trading practices of other countries, which are abetted by the greedy and unsconscionable attitudes of certain importers and corrupt  government officials.   At this point, let me stress that our local producers have huge handicaps, which the full implementation of the safety net laws can never cure.  Masyadong tagilid ang laban ng ating mga local producers sapagkat walang government assistance gaya ng ginagawa ng Malaysia at Thailand para sa kanilang mga negosyante at magsasaka, mataas ang cost of doing business and farming sa atin, sobrang baba ng mga taripa para sa mga inaangkat at sobrang taas naman ng buwis para sa mga lokal, talamak ang smuggling na hindi nagbabayad ng buwis, at halos walang opisyales na nagmomonitor sa unfair trade practices ng ibang bansa.

Gayunpaman, matiyaga ang mga industry and agriculture affiliates ng FTA.  Kahit magastos, bumababad sila sa customs para magbantay ng mga smuggled goods, nagmomonitor sila ng mga importations at presyo ng mga commodities at pumupunta sa Tariff Commission, DTI at DA para itulak ang mga ito na gamitin ang mga batas sa safety nets.   Trabaho ito ng gobyerno, pero nagiging trabaho ng local producers.  Ito ang dahilan kung bakit nagsasampa sila ng mga kaso laban sa import surges sa semento, bakal, ceramics, gulay at iba pa.

But now a sad development has taken place.

Two weeks ago, our Supreme Court reversed the decision of the Court of Appeals and sustained the decision of a lower court restraining or stopping the executive branch in enforcing  the Safeguard Measures Act or RA 8800, the safety net law that allows farmers and industry to get temporary relief against the predatory trade practices of other nations through safeguard tariffs, on the ground that it is unconstitutional. Shocking, terrible, appalling – frankly, I am at a loss for words to describe this turn of events. For the truth is that globally, nations aggressively protect their domestic industry and agriculture against the unfair trade practices of other nations through the enforcement of similar safety net laws.  The WTO itself recognizes the inherent right of member countries for such laws.  Clearly, such a decision of the highest court can only happen in a country called the Philippines.  This decision is one for Ripley’s believe it or not.

Ten years ago, when we lost the WTO Treaty ratification battle in the Senate, we also went to the Supreme Court. We raised the threat of fuller liberalization wiping out local industry and agriculture and globalization under the WTO favoring the imports.   The Supreme Court’s answer —  our fears are baseless, for they assured us: ‘safety nets are readily available’  for our affected farmers and manufacturers.

But some seven years after the said decision, here comes the Supreme Court, the same court which declared that safety nets were available,  now telling us that we cannot  avail of the safety nets because there is a need to protect the rights of the importers and their ‘workers’.  How many workers do these importers have compared to local industries?

The safety nets law are the last remaining protection for our domestic industries and agriculture against unbridled liberalization. Striking them down should never be an option. Other countries do not think or even dare do this. In fact, they use the safeguards as frequently as possible. For example, when steel imports to the US were eating into the market of US steelmakers, Bush immediately imposed a safeguard of 30 per cent. When the US prawn industry complained of injury due to the entry of Vietnamese prawns, Bush gave a safeguard tariff of 105 per cent. What is clear from the US behavior is that they protect the interests of their manufacturers and farmers first and foremost, no ifs and buts.   Imposing safeguards is an automatic response to any import surge, while in the case of the Philippines, applying a safeguard measure for any hurting industry is literally like passing through the eye of the needle, made narrow and impenetrable by the anti-Filipino perspective of certain officials in all three branches of the government.

The cha-cha threat

This brings me to the other sad and disturbing development – the campaign to change the Constitution and purge it of the few remaining ‘nationalist provisions’, ostensibly to promote more investments, jobs and growth.

As we all know, Malacanang is using cha-cha to insure its political survival. But worse is that it is also promoting cha-cha  to fast-track the further de-nationalization of the economy, an agenda that is spelled out in chapter 25 or the last chapter of NEDA’s Medium-Term Philippine Development Plan for 2005-2010.  I will limit my comment on the economic aspect of this issue.

You know, I can not appreciate the logic of those proposing to remove the nationalist provisions in the Constitution in the belief that the country would reap more benefits through more of the same kind of liberalization it has been implementing in the last three decades. Have these proponents forgotten that the Philippine economy is one of the most open in Asia and in the world today?  We have eliminated thousands of imports from a list of restricted items.  We have reduced our tariffs way ahead of many ASEAN and Asian countries, so much so that our tariffs now are just a third of those of Thailand and much lower compared to China, India, Vietnam, South Africa and Brazil.   We have opened the economy to foreign investors by coming up with a Foreign Investments Act with a short negative list, meaning only a few areas of the economy remain restricted to foreign investors.  We have even de-nationalized the retail and distribution sector, which means Wal-Mart can now come in anytime.  We have, on the initiative of Senator Gloria Arroyo, broadened the meaning of condominium to mean buildings, facilities and land, which foreigners can lease for 50 years renewable by 25 years.  This is a total of 75 years, which are longer than the average life span of a Filipino in these crisis-ridden times.

And yes, we have been throwing one party after another, dangling fiscal and other incentives, for foreign investors to come in.  And yet, they do not come to us, except the speculators. They  have been going to China, India, Vietnam, Malaysia, Thailand and other countries which maintain very restrictive laws against foreign land ownership and  foreign control of public utilities, media and advertising, the  areas of the economy which our cha-cha proponents say should be pried open, as if foreign investors can not go into these economic activities via the 60-40 equity sharing, the BOT schemes, the service contract agreement and so on.

What I am really saying is that the cha-cha proponents, especially those from NEDA, are trying to fool the nation by saying that more liberalization is good.  But a one-sided and unilateral liberalization has never been good to us, as reflected in the state of local industry, agriculture, employment and poverty now gripping the lives of millions of our people.

The problem is not cha-cha.  The problem is we are not implementing what the Constitution mandates. Section 19, Article 2 of the charter provides: “the State shall develop a self-reliant and independent national economy effectively controlled by Filipinos”.  We have not complied with this because we have surrendered economic policy making to the IMF-World Bank group and we have rushed into economic liberalization in a pell-mell fashion.

We, at the Fair Alliance, are firmly against the Constitutional change because the primary intent of those behind the initiative is to take away the policy of economic nationalism enshrined in the Constitution. It is strange that our policymakers are so bent on purging the Constitution of its nationalist economic provisions, when in fact it was the absence of economic nationalism in economic governance that is at the roots of the present economic crisis. It is not the nationalist economic provisions that are blocking foreign investments to come in. The high cost of doing business and farming in the Philippines, the gaps in infrastructure, the lack of economic support structures, the corruption in the government and the lack of dynamism in the domestic economy, these  are the main reasons why investors have not come and are not coming to the Philippines.

The truth is that our economic planners and policy makers, with their dependence on foreign advisers and lenders, never bothered to implement the Constitutional mandate to develop a progressive and balanced economy effectively controlled by Filipinos. We never tried to develop a self-reliant and independent economy. We never observed economic nationalism, and yet it is economic nationalism which is now being blamed for our economic backwardness.  This is a typical example of neo-liberal doublespeak.

We, at the Fair Trade Alliance suspect that the real reason for economic cha-cha is to make the Constitution compatible with the demand of the developed countries to open up our service sector.   Tapos na ang industry sector liberalization, at tuluy-tuloy naman ang agricultural sector liberalization.  So services naman, in the name of the WTO’s General Agreement on Trade in Services.   What do they want opened up?  Everything, starting with the real estate market, public utility operation service, media and broadcast, and so on. Tatamaan din po ang education   service, health service, water distribution service, power distribution service, grains stabilization service and so on and so forth. GATS derogates the power of the State to regulate or intervene in the market for services and requires member-states to open up service industries to foreign players, who should be treated like the nationals. .

We need to expose the anti-Filipino thrust of cha-cha. We must educate the legislators and the larger public on the true causes of our economic misery and backwardness, which are both rooted in the unilateral and one-sided liberalization imposed by the IMF-World Bank group.   We must   push our trade negotiators to resist a one-sided GATS-liberalization.   Hindi dapat maulit sa services ang sakunang nangyari sa industriya at agrikultura.

Conclusion

Sa pagtatapos, sana ay hindi ito ang ating huling pagkikita.  Marami tayong dapat gawin.

Unang-una na, ibalik ang nawawala nating soberenidad sa kabuhayan.  Sa cha-cha, lalo itong mawawala.

Ikalawa, igiit natin at palawakin ang safety nets.  Walang silbi ang pamahalaan kung hindi nito kayang magbigay ng safety nets sa sarili niyang mamamayan at producers.  Dapat baliktarin ng Supreme Court ang mga nabanggit niyang desisyon na yan.

Ikatlo, dapat nang itakwil ang neo-liberal economic ideology na gabay ng pamahalaan nitong nakaraang tatlong dekada.  Puro kapahamakan lamang ang ating inabot.

Sobra na!  Tama na!  Palitan na!
—————————

Speech delivered during the Forum: “Nationalist Domestic Regulation under Intense Globalization held at Max’s Restaurant, Elliptical Center, Quezon City on August 29, 2005.

The Fair Trade Alliance (FTA), established in September 2001, is a broad coalition of labor, industry, agricultural and non-governmental organizations which helps promote, strengthen and defend Philippine industries, agriculture, jobs and livelihoods from the onslaughts of unbridled trade liberalization and globalization.

The petition for safeguards involves matters of public interest which the government must sufficiently and decisively address

The issue of safeguards is an issue crucial to all sectors and domestic producers, not just the cement or construction industry. Safeguards is a globally-recognized safety net.  It has become essential for the survival of Philippine industries, the agricultural sector and local jobs, especially since Philippine tariffs on imported goods have been unilaterally reduced to 0-5%.

Ironically, the unilateral tariff reduction has less to do with our WTO commitments.  They are self-inflicted tariff cuts. A regime of very low tariffs for locally produced goods, aggravated by limited access to safeguards, will be the death knell for Philippine industries, agriculture and Filipino workers and farmers, and ultimately the consumers as well.

The local cement industry is similarly situated as the local ceramic tile and glass industries and as such should be accorded the same remedy

Your honors, the cement industry is in a far worse shape than the ceramic tile or glass industry, both of which were given safeguard measures. In fact the cement industry is facing an even bigger threat of an import surge than these two industries. Regional excess capacities of cement producers from other countries are still high.  Without adequate tariff protection, our meager domestic market is a prime target for dumping.

Even if the efficiency-enhancing measures are now underway, the local cement industry still needs time to fully adjust to the threat of imports, more so with the increase of fuel costs and the continuing decline of the peso.     The modernization and expansion program has been badly affected by the Asian financial crisis and its residual impact, the ensuing peso devaluation, the massive dumping into the country of imported cement in 1999-2002, the present fiscal crisis and the low-level demand recovery that we are experiencing.

There is an urgent need to protect the welfare of the filipino cement workers

More than 3,000 Filipinos leave the country every day, including women, some of whom are degraded by prostitution, trafficking and other violations in their places of destinations. Yet, we have a situation where thousands of cement workers opt to stay and contribute to the country’s economy.  What does the government do to reward their sense of loyalty? We cannot leave the industries they are in vulnerable and unprotected for the sake of free trade.

It is, thus, ironic that we continually import products from countries such as the United States, China, Taiwan, Japan and the European Union.  Yet to balance our trade, our biggest export is not any domestically manufactured product but our most precious human resource – the Overseas Contract Workers.   Yes, our “bagong bayani” should be commended for shoring up the economy.   But these OCWs or OFWs, who number by the millions, are victims of an industrial policy regime that does not care about the survival and growth of local industries.

The cement industry is one of the few solid industries still standing under globalization

The need to assist the cement industry is even made more crucial because it is one of the few industries still standing, after two to three decades of mindless globalization and unilateral liberalization.   Many of the industries such as textile, tire, rubber, wire, shoe, etc. have either collapsed or are in the advanced state of decline.

And yet in the 1960s, the Philippine economy was seen as one of the most promising in Asia. Industrial experts from Korea, Taiwan and other Asian nations would visit the country to try to learn how to produce another “Asian car,” and experts from Thailand and other parts of Southeast Asia came in droves to Los Baños to learn how to “green” the countryside and produce more rice.

To survive global and regional competition, our industries need all the assistance the government can give vis-à-vis industries of other countries which do not hesitate to provide their own industries credit, technology, marketing and other forms of assistance, including higher tariffs.

Further, for our domestic industries to remain going concerns under globalization, they need to modernize by investing on new technology, skills and capacities, for this is the only way they can beat the cheap labor and subsidies of other countries.  And yet, the cement industry, along with the petrochemical industry, is one of the few industries in the Philippines which have invested on modernization.

Without the safeguards, the industry has little incentive to sustain the ongoing modernization.

Importation does not necessarily reduce cement prices

Cement importers have used low prices as a battle cry for the non-impairment of cement imports. Much has been said that it is the consumer who would reap the benefits of having free market forces setting the price. However, history shows us otherwise.

During the height of the import surge, though imports were brought in at an average of P86 because of lower labor, electricity and fuel costs, they were still being sold at an average of P135 – P150 per bag which is the same price range as local cement. The Citizen’s Alliance for Consumer Protection or CACP recognized that the importation of cement has never benefited the Filipino consumer.

In fact, the Tariff Commission itself found in its staff report dated January 2002 that despite the fact that imported cement came in at cheap prices ranging from P58 to P86 per bag, they were still being sold at retail prices equal to or higher than local cement. Imported cement only benefited the importers who made enormous profits from their operations without sharing the benefits with the consumers and the government. How can we explain a situation where 97 workers from one cement plant paid P3.2 million in taxes whereas the 4 biggest importers paid only P950, 000. And this from a minute sample of only 97 workers!  What more if we include the more than 20,000 cement workers and the numerous workers from allied industries dependent on the cement industry?

Free trade and fair trade are not mutually exclusive

It has been argued that the imposition of safeguard measures against the importation of cement would be inconsistent with our WTO commitments. On the contrary, WTO allows countries to use safeguards to protect its national interests. If it were true that the WTO required us to make it difficult to obtain safeguards, why do countries like the United States impose safeguard tariffs on steel and shrimps to defend their industries. Even developing countries like India, Argentina and Ecuador use it against import surges so that their industries can survive the onslaught of imports? There is no reason why we cannot avail of it for ourselves, to keep our own industries.

The Fair Trade Alliance is not averse to free trade for as long as it is fair to the Philippines and to the Filipinos who have suffered long enough. We do not seek protection for every industry but we do make it a point that those countries who take advantage of our low tariffs yet refuse to reciprocate be subjected to exhaustive scrutiny and be made to explain why they seek leniency from our government without an equivalent act from theirs.

The Fair Trade Alliance fears that the cement industry will also go in the way of textiles and tires. We fear the day when our country will be no more than a consuming nation, incapable of creating and producing even for its people.  Incapable of even providing jobs and sustenance to its people.  And instead relentlessly exporting its people to faraway lands where it cannot even protect them.

It is our most ardent appeal that the extension of the safeguard remedy for the cement industry, for it is clearly impressed with Public Interest. It is necessary to protect an industry vital to the Philippine economy and development. The cement industry, for its part, is making a positive adjustment to import competition and must be given ample time to continue its efficiency measures to make it survive and actually become competitive on the face of the imminent and inevitable onslaught of regional threats from countries such as Taiwan, Japan and China.




  • FairTrade in pictures

  • Recent Posts

  • Archives

  • Founded in 2001, the Fair Trade Alliance (FairTrade) of the Philippines is a broad multisectoral coalition of formal and informal labor, industry, agriculture, NGOs and youth pushing for trade and economic reforms.
  • FairTrade seeks to promote a job-full and progressive Philippine economy through: (1) the promotion of fair trade rules and active agro-industrial policies based on the existing development needs of the nation, (2) the development of a positive agro-industrial culture to foster innovation, hard work and solidarity between and among the productive sectors of Philippine society, and (3) the transformation of an economy debased and stunted by colonial mentality, unequal trade and neo-liberal dogma into a modern, sustainable and broad-based.
  • Fair Trade Alliance (FairTrade)
    3/f Philippine Rural Reconstruction Movement (PRRM) Headquarters
    #56 Mo. Ignacia cor. Dr. Lascano, Quezon City, The Philippines
    (+632) 372 49 91 to 92 local 30
    (+632) 372 39 24
    fta[at]fairtradealliance.org

    FairTradeWeb is powered by Wordpress, MediaMax, MediaFire, Yahoo!, FeedBurner and Flickr.

  • Subscribe in Bloglines