TC: No more safeguard duties on vehicle imports

by Louella Desiderio (The Philippine Star), 25 Jul 2021

MANILA, Philippines — The Tariff Commission (TC) has thumbed down the imposition of safeguard duties on vehicle imports following its investigation into the case.

In a report, the TC recommended “that no definitive general safeguard measure be imposed on importations of the CBU (completely built up) passenger cars (PC) and CBU light commercial vehicles (LCV).”

According to the TC, there was no increase in imports of PCs and LCVs both in absolute terms and relative to domestic production during the period of investigation (POI) from 2014 to 2020.

“Since it has been established that CBU PCs and CBU LCVs were not imported in increased quantities (whether absolute or relative to domestic production) during the POI, the determination of serious injury or threat thereof, causation, and unforeseen developments has become moot and academic,” the TC said.

The TC conducted an investigation after the Department of Trade and Industry (DTI) ordered the imposition of the provisional safeguard measure in the form of a cash bond amounting to P70,000 for every imported PC and P110,000 for every LCV unit brought in from overseas.

This, after the DTI found a link between the higher vehicle imports and the injury to the domestic motor vehicle manufacturing industry in its evaluation of the petition filed by labor group Philippine Metalworkers Alliance (PMA).

PMA filed the petition for safeguard measures in 2019 as it claimed the increase in vehicle imports in the country reduced opportunities of workers in local assembly plants to manufacture cars.

The provisional safeguard duties, which took effect last February, were to be in place for 200 days while the TC is conducting its investigation into the case.

Automotive firms have been collecting deposits from customers purchasing new vehicles for the provisional safeguard duties which they said would be returned once the TC recommends against the imposition of the safeguard measures.

Under Republic Act 8800 or the Safeguard Measures Act, the country is allowed to impose a safeguard measure or higher tariff on imports to provide relief to the domestic industry when there is serious threat or injury from increased imports of like products.