Trade tariffs should be extended—industry

VEHICLE assemblers and parts makers are pushing to extend up to 2013 the tariff cover under the Japan Philippines Economic Partnership Agreement in parallel moves to protect the automotive industry from being displaced by Japanese imports.

Trade Undersecretary Elmer Hernandez told reporters that Manila would take advantage of the flexibilities provided for by the trade deal to ensure the viability of the local industry.

“I would be meeting with both the auto assemblers and parts makers to give them directions so that the viability of the auto industry is ensured,” said Hernandez, who is in charge of the trade department’s policies on investment and local industries.

Under the trade deal, automotive parts imported from Japan that also produced locally are slapped with a 30-percent tariff. The tariffs were supposed to go down to zero by January 2010, although industry players could delay the lowering of tariffs but not after January 2013.

“The position of the industry is to delay everything [lowering of tariffs for auto parts that are currently being locally produced] until 2013. This is for the domestic market, there is the threat local parts would be displaced by Japanese imports unless the tariffs are in place,” Hernandez said.

He said the Motor Vehicle Parts Manufacturers Association of the Philippines had asked the Board of Investments to have the tariff cover extended. Manila, on behalf of the industry, had asked Tokyo for a negotiation to make the trade deal tariffs flexible.

For completely built-up units or fully assembled vehicles, the 30-percent tariff for engine displacements higher than 3 liters would go down to zero by January 2010 unless the importing country could negotiate in time for the tariffs to stay in place until January 2013. –Elaine R. Alanguilan, Manila Standard Today