A win for consumers

After weeks of hearings and investigations conducted on the matter, the Tariff Commission (TC) has issued two controversial orders with expected huge effects not only on the local cement industry but also on cement users and on the entire economy.

The first one lifted a three-year additional special safeguard duty imposed on certain types of imported cement to prevent local cement manufacturers from an unhealthy surge in imports, while the second one imposed a new five-year dumping duty for imports of cement from Vietnam.

Safeguard duties are allowed and imposed by the government when an industry is negatively impacted by an unforeseen, sharp and sudden increase in imports. Meanwhile, anti-dumping duties are imposed on imports that are being sold at a price below the fair market value of similar goods in the country of origin.

The imposition of safeguard duties and anti-dumping duties was among the concessions obtained by members of the World Trade Organization in exchange for either liberalizing imports or lowering regular tariffs and duties – basically in exchange for trade liberalization or opening their markets to other countries. But safeguard and anti-dumping duties cannot be used indirectly by any country as a barrier to imports.

In 2019, the Department of Trade and Industry, upon the recommendation of the TC, imposed a definitive safeguard duty on imported cement from various countries for three years or until October 2022. The safeguard duty for the third year was P200 per metric ton or P8 per kilo bag of imported cement. Under RA 8800 or the Safeguard Measures Act, the DTI is mandated to protect domestic industries from serious injury caused by import surges.

The objective was to provide temporary relief to the domestic cement industry while it undertakes measures to boost its competitiveness amid trade liberalization.

And then, in December 2021, the DTI imposed an additional provisional anti-dumping duty on certain imported cement types from Vietnam following allegations that these imports are being sold here at dumped prices. Sellers from Vietnam have been found to be bringing into the Philippines cement at a price that is lower than the price these items are being sold in Vietnam. Dumping is being resorted to by some countries to get rid of excess supply.

Both the safeguard and anti-dumping duties were imposed following a petition filed by the Cement Manufacturers Association of the Philippines (CMAP) whose members claimed that these surge in imports as well as the entry of dumped cement would put their businesses at risk, endanger the jobs of its workers, and reduce government revenues.

But the safeguard duties were only up to this month and so the group filed an extension of the period of imposition of the duties, saying that inspite of this additional duties, import levels are still high and that the amount of the duty is not enough to curtail this surge.

But the TC recommended the non-extension of the definitive safeguard measures on importations of ordinary Portland cement Type 1 and blended cement Type 1P.

It said that during the period under review from 2019 to 2021, the domestic cement industry maintained its market standing, increased its mill capacities, stabilized its manufacturing costs, and improved its profitability. It added that the industry was able to return to pre-pandemic profitability levels in 2021 and that during said period, there was no significant overall impairment in the industry’s position that constituted serious injury.

The commission said non-extension of the safeguard measure would prevent price increases in both local and imported cement which, in turn, would lead to positive spillover effects on the growth of the construction industry, which has a high contribution to gross capital formation.

It added that healthy market competition would force the local industry to continue to upgrade its technological know-how and manufacturing facilities, bolster operational efficiencies, reduce costs, and fill the unserved demand.

However, in another order, the TC directed that new dumping duties be imported on Vietnamese cement for a five-year period up to 2027 after concluding that there was imminent threat of material injury to the local industry due to Vietnam’s substantial cement overcapacity which may enable it to rapidly increase its exports.

So basically, what the TC is saying is that while our domestic cement industry can survive and has in fact thrived even in the midst of the entry of imported cement being sold in the country at competitive prices because reimposing safeguard duties to protect the industry from cement imports would not be beneficial to the country and the consumers, it is still a no to dumping of cement from Vietnam.

EU’s Indo-Pacific strategy

The European Union last year unveiled its strategy in so far as the Indo-Pacific region is concerned, partly in recognition of the growing social and economic importance of the region.

After all, the region is said be home to more than half of the world’s population. China, Japan, South Korea and India are among EU’s largest trade partners and over half of the global GDP is generated from the region. Trade between the EU and the Indo-Pacific is also the highest inter-regional volume in the world.

But the Indo-Pacific is also home to one of the world’s greatest concentration of challenges with global implications, including political, security, and defense.

The EU, with the support of the EU Policy and Outreach Partnership in ASEAN countries, held a forum entitled “European Union Indo-Pacific Strategy: Ensuring Security and Prosperity for the Future” where EU Ambassador to the Philippines Luc Veron underscored that the EU wants to work with its partners in upholding the principles of peace, stability, prosperity, and respect for human dignity.

For her part, Paola Pampaloni, Asia Pacific European External Action Service deputy managing director, emphasized that in the wake of the Russia-Ukraine conflict, the strategy can be used to uphold the rules-based international order, which would effectively enable the principles of democracy, international law, human rights, and the rule of law to prevail.

Foreign Affairs Undersecretary Jesus Domingo, meanwhile, acknowledged the rich and enduring relations that the EU and the ASEAN had in the last 45 years, EU’s past efforts and contributions to the region and commended EU’s strategy for cooperation in the Indo-Pacific.

During the forum, Miriam College president and former ambassador Laura del Rosario, Stratbase ADR Institute managing director Dindo Manhit, and Ateneo European Studies Program director Manuel Enverga III discussed how the Philippines and the ASEAN will benefit from the strategy, including in areas such as reinforcement of ocean governance in the region in full compliance with international law; fortification, diversification, and implementation of existing trade relations; and the collaboration with partners to fight, mitigate and adapt to climate change.

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