In a letter to the Tariff Commission, the Philippine Automotive Federation Inc. (PAFI), through its president Vicente Mills Jr., said "the issue of imported used motor vehicles from Japan should be given due consideration in the investment policy dialogues under JPEPA, or the Japan-Philippines Economic Partnership Agreement."
The Philippines and Japan are currently in the middle of negotiating for the third JPEPA.
Mills argued that "the unabated influx of used motor vehicles from Japan erodes the viability of existing investments and hinders investment opportunities in the automotive industry."
He pointed out that "ironically, substantial Japanese investments in the local automotive industry are among those being directly undermined by the used vehicle imports from Japan."
He added that the current practice of exporting used vehicles to the Philippines from Japan is in conflict with mutual enhancement of investment opportunities and does not encourage investor confidence in the local industry.
Mills stressed that the Philippines should seek to further strengthen and pursue existing technical cooperation projects with the Japanese government and negotiate for expanded small and medium enterprise development, particularly for parts and components manufacturing through skills development programs and equipment and technology acquisition, among others.
On the issue of tariff, Mills said the tariff differential between completely knocked-down (CKD) and completely built-up (CBU) vehicles be maintained.
He also reiterated the general position of the local automotive industry that Most Favored Nation (MFN) tariff rates be maintained for motor vehicles and parts and components until 2010.
However, Mills acknowledged that "any possible specific concessions can be explored like those pertaining to products not locally produced subject to further study and consultation among the stakeholders."
The PAFI is an umbrella organization encompassing the Association of Consolidated Automotive Parts Producers Inc., Chamber of Automotive Manufacturers of the Philippines Inc., Motorcycle Development Program Participants Association Inc., Motorcycle Parts Producers and Exporters Associations and Truck Manufacturers Association.