Petrochemical industry players had been banking on the government to negotiate this month with its ASEAN partners for the extension of the tariff protection on petrochem products.
Roxas clarified that while government would indeed try to seek for an extension, it would not be up to the year 2010. "Don’t dream of 2010," Roxas told petrochemical firms.
Under the Philippines’ commitment to the Asean Free Trade Agreement (AFTA), the current tariff levels ranging from seven percent to 16 percent would have to be brought down to five percent by the year 2003.
He pointed out that Malaysia had only asked for an extension of up to 2005 for its tariff wall for its automotive industry.
The trade secretary said that the government would study the impact of maintaining high tariffs against the needs of the industry, other downstream manufacturers and consumers.
Roxas noted that maintaining high tariffs to protect a product over a long period of time would only result in higher prices for consumers.
Government had earlier indicated it would be willing to negotiate for an extension of the tariff wall for the petrochem industry in an effort to help it succeed with a planned naphtha cracker plant.
Government had been trying to get almost all of the petrochem players to join and support the naphtha cracker plant project which is estimated to cost around $600 million.
The petrochem industry is a vital industry that producers packaging materials such as plastics and styrofoam. – Marianne Go