Govt asked to raise taxes on imports to help local firms

MANILA, Philippines - Manila was asked to take advantage of the lull in global trade talks by raising tariffs on imported goods, a move allowed by the Philippines’ global trade commitments. The government now has the chance to give local manufacturers “a much-needed reprieve" by raising the Philippines’ applied rates on imports without violating provisions of the World Trade Organization (WTO), the Federation of Philippine Industries (FPI) said. Applied rates are the actual amount of taxes imposed on foreign-made goods. These rates are usually lower than bound or binding rates, the amount of taxes a nation has promised to impose on imported products, as indicated in various WTO provisions. Under the WTO, a nation can raise tariffs as long as it does not go beyond bound rates, Jesus L. Arranza, president of the Federation of Philippine Industries (FPI) said. “This is a valid move and is accorded to any country within the WTO agreement," Arranza added. Manila should not hesitate to take action regarding this matter because other countries are also raising their trade barriers to aid their domestic industries’ survival. The country may be unable to enjoy the huge policy space if it refuses to raise its applied rates, Arranza said. The Philippines has committed to collect an average of 23.4 percent duties on non-farm products although it currently imposes a seven percent rate on these kinds of foreign-made goods. For agriculture products, the average bound rate is 34 percent, while the applied rate is 11 percent. Meanwhile, critical petrochemical products have an applied rate of 15 percent. “If the US and the other countries are protecting their domestic industries, why can’t the Philippines do it also? The Philippines should not fear retaliations from other countries," he said. The US has included a “Buy American" clause in a law, mandating the use of US-made steel products for government-funded projects despite an expected 25 percent hike in costs, Arranza said. He added that China has provided assistance to its steel manufacturers by granting 13 to 17 percent rebates to its exporters. Local agencies should do the same by prioritizing locally-made products, Arranza said, adding that officials should no longer wait for a formal presidential directive to support the “Buy Filipino" move. “The President cannot just announce that kind of policy. It is incumbent upon the officials to do it voluntarily," he said. - GMANews.TV