WTO airs concerns on Philippines duties on vehicle imports

MANILA, Philippines — Members of the World Trade Organization (WTO) have raised concerns on the Philippines’ move to impose provisional safeguard measures on imported vehicles.

Japan, Thailand, Korea, Indonesia and the European Union raised concerns on the provisional safeguard measure currently imposed by the Philippines on imported passenger cars (PC) and light commercial vehicles (LCV) during the WTO safeguards committee meeting held last Monday.

These concerns include the provisional safeguard measure not meeting the requirement of being a response taken to unforeseen circumstances.

There are also concerns on the action being taken based on an investigation of a petition filed by a labor union, and not by the affected domestic industry.

“The Philippines said it would look carefully at the concerns raised, but said safeguards are a useful feature of its trade policy, as such measures are time-bound and preferable to raising tariffs through legislative acts,” a Geneva trade official said.

Under the Safeguards Agreement, a WTO member may impose safeguard measures through higher tariffs or other actions when the domestic industry is injured or threatened with serious injury by an unexpected surge in imports.

The agreement defines domestic industry as producers as a whole of the like or directly competitive products or producers who collectively account for a major proportion of the total domestic production of those products.

During the preliminary conference held last February by the Tariff Commission (TC) on the safeguard measure on vehicle imports, automotive makers and importers questioned the validity of the petition filed by the Philippine Metalworkers’ Alliance (PMA) saying the group does not represent the domestic industry.

PMA, which is registered with the Department of Labor and Employment, is a national union of automotive, iron and steel, electronics, and electrical sectors, including affiliates in key automotive industry players.

The Department of Trade and Industry (DTI) imposed the provisional safeguard measure in the form of a cash bond amounting to P70,000 for every imported PC and P110,000 for every LCV unit brought in from overseas, after it found a link between the higher vehicle imports and the injury to the domestic motor vehicle manufacturing industry following its evaluation of the petition of the PMA.

The provisional safeguard duties, which took effect last February, would be in place for 200 days while the TC is conducting its investigation on the case.

TC commissioner Ernesto Albano said earlier the commission assumes regularity as the petition went through the DTI.

Earlier, PMA president Ruel Punzalan said the group is a legitimate stakeholder of the automotive industry.

He also said other unions have filed a similar petition and were supported by the government upon seeing merit.