Protecting local industries from the influx of imported goods

To guard against excessive importation, Agriculture Secretary Luis P. Lorenzo Jr. said he prefers the use of trigger prices and trigger volumes. According to Lorenzo, trigger price computations are special safeguard measures designed to protect local industries from the influx of imported goods. He explained that "additional tariff will be levied on imports should the products come in at prices lower than the trigger prices."

Applying the same principle on volume mechanism, addi-tional tariff will be levied on imported commodities should the quantity be alarmingly large.

A technical wor-king group (TWG) recently met to dis-cuss the principle and application of trigger volumes. Attending the mee-ting were represen-tatives from the Agricultural Credit Policy Council (ACPC), Trade Re-medies Office (TRO), National Fe-deration of Hog Farmers Inc. (NFHFI), DataCon, Bureau of Animal Industry (BAI), Rizal Hog Farmers’ Association (RHFA), Policy Service, Livestock Development Council (LDC) and National Meat Inspection Commission (NMIC).

Assistant Secretary Segfredo Serrano explained that computation of trigger volume could be within a 10-year period. Along the way, the secretary may recommend tariff modification on selective commodities based on the group’s identification of priority commodities..

RHFA’s Manuel Lao noted that the volume of imported bellies and swine cuts (salted, soaked in brine, dried or smoked) has been very high: 3,995 metric tons (MT) over the last three-year period (2000-2002) and 5,890 mt over a 10-year period (1992-2002).

LDC Executive Director Pedro O. Ocampo suggested that the 1996 data should be clarified from the source due to unusual volume compared with the previous and succeeding importations. Example — bellies and cuts of pork products (salted, soaked in brine, dried or smoked): 48,300 MT (1996); none (in 1994-1995 and 1997-1999).

Ocampo led the group in identifying priority commodities for tariff modification. Among them (in the last three years) are: frozen edible offal (15,462 MT); frozen parts of swine other than pork bellies and fore-ends and cuts, thereof (9,066 MT); frozen livers (3,739 MT); frozen hams, shoulders and cuts thereof with bone-in (2,781 MT): preserved meat, offal and mixtures (457 MT); hams and swine cuts in airtight containers (382 MT); and frozen carcasses (327 MT).

These volumes are equal to 125 percent of annual average import quantities in the last three years, the alternative formula for trigger volume as provided for by law if consumption of the products is not taken into account.

From the discussions, it appears that additional tariffs can be slapped on the listed items since their quantities are higher than the required minimum level of trigger volumes.

According to Serrano, tariff modification can also be made through maximum application of tariff aside from trigger volume and price.

For further clarification, Jerome Bunyi of DA’s policy service explained that except for edible offal all other commodities are applied with the maximum bound tariff.