RP urged to enter into joint deal with China to combat smuggling

MANILA, Philippines - The Philippine government should undertake steps to enter into a joint agreement with China on ways to halt rampant smuggling and importation of Chinese products that have been adversely affecting the sustainability of the industries and jobs in the country.

In a paper, Joseph Francia and Errol Ramos of Fair Trade Alliance said the persistent and rampant smuggling of foreign goods into the Philippines is among the challenges of Philippine-China trade relations.

“Smuggling has been a continuing scourge of Philippine manufacturing and agricultural sectors. It has not abated and has in fact worsened. Many Philippine companies, even those that are competitive globally, had to close shop or reduce production and employment, due to smuggling,” they said.

Francia and Ramos particularly identified the vegetable and shoe industries as the hardest hit by smuggling. Other affected sectors are steel, paper, cement, petrochemicals, plastics, ceramic tiles, among others.

They pointed out that while the early harvest provision of the ASEAN-China free trade agreement (FTA) allowed the importation of vegetables at zero tariffs, smuggling continues as importers try to avoid the 12-percent value-added tax (VAT).

“Given the higher cost of doing business in the Philippines, there is no way that domestic products will be able to compete with Chinese goods,” they said.

Despite the issue of rampant smuggling of Chinese goods into the Philippines, there does not appear to be any complaint on the part of China regarding smuggling of Philippine products into China.

“Thus, the burden falls on the Philippine government to bring this issue to the attention of China and take initiatives to seek its cooperation to minimize this cancer. It is noteworthy that among the many MOUs/MOAs (memorandum of understanding/agreement), not one addresses this issue,” the paper said.

Among other measures, it recommended that China can require its exporters to make available the inward shipping manifest to officially accredited representatives of agriculture and industry.

The Philippine government can require the same of its exporters, it added.

Moreover, the Department of Agriculture Task Force on WTO Agricultural Renegotiation, which includes such accredited representatives for agriculture, would be an existing mechanism for the monitoring of imports coming from China.

“FairTrade can work for the creation of a similar body for industry, with the Department of Trade and Industry as the lead agency,” Francia and Ramos said. — Philexport News and Features