Carmakers back DTI on CBU import tariff reciprocity

The Philippine Automotive Federation Inc. (PAFI) supports the position of the Department of Trade and Industry (DTI) and the Board of Investments (BOI) to apply the principle of full reciprocity to Malaysia with regards to its plan to fix its Common Effective Preferential Tariff (CEPT) rate for completely built-up (CBU) automobiles at 20 percent.

In a draft letter to Tariff Commission chairman Edgardo B. Abon, PAFI president Vicente T. Mills Jr., relayed the PAFI’s position that "any CBU exports of Malaysia to the Philippines should be imposed an identical rate of 20 percent in the same way that Malaysia will impose on its CBU imports."

According to Mills, "in the interest of fairness and equity, we respectfully submit that full reciprocity would provide the necessary balance in the tariff regime within the region without giving a particular member economy an undue advantage or putting another member in a disadvantageous position."

At present, the Philippines along with Thailand and Indonesia impose a five-percent CEPT rate on CBUs.

Although no local car manufacturer is currently affected by the Malaysian tariff proposal, the Philippine government is merely setting the reciprocal policy for the future so as not to disadvantage any local automotive manufacturer that may eventually export to Malaysia.

Malaysia is very protective of its lone automotive manufacturer Proton which is a joint venture with Mitsubishi Motors of Japan.