THE Department of Trade and Industry (DTI) backed the lifting of non-tariff barriers and replacing them with an appropriate tariff instead, following the Economic Development Cluster’s (EDC) call to ease the country’s trade system.
Trade Secretary Ramon Lopez, in an interview with the BusinessMirror, said that imposing the proper tariff on imports while removing non-tariff barriers can support the local industry.
“It is always the best economic and trade policy principle to remove non-tariff barriers, that usually lead to bureaucratic inefficiencies and governance issues in issuing permits, higher costs and economic rent, and instead just replace it with the proper and needed tariff rate to develop and nurture the industry,” Lopez said.
Finance Secretary Carlos G. Dominguez III said, in a letter on April 20 to Senate President Vicente Sotto III, that during an EDC meeting last month, it was discussed that key commodities that propped up the inflation were due to the following factors: “government tariffs, low MAV [minimum access volume] quotas and non-tariff barriers to trade.”
The EDC then directed the DTI and Department of Agriculture (DA) to conduct a study should the MAV system be removed and replaced with an appropriate tariff rate. Lopez said the DTI is currently working on this with the DA, which is the lead agency given that the “MAV is for a few selected agri-commodities.”
MAV refers to the certain volume of agricultural imports that are imposed lower tariffs. In the Philippines, it covers rice, corn, pork, poultry meat, coffee and sugar.
Sought for comment on the matter, Tariff Commissioner Ernesto L. Albano declined to give an opinion for the moment.
“It is premature for me to comment on this as it has not even filtered down for an interagency level discussion,” he told the BusinessMirror.
In the 2021 National Trade Estimate Report on Foreign Trade Barriers by the US Trade Representative (USTR), among the non-tariff barriers cited were the quantitative restrictions. It was noted that the country does not allow the importation of used motor vehicles in certain cases.
In addition, USTR said there have been reports of corruption and irregularities in customs processes. These include “costly delays, irregularities in the valuation process, 100 percent inspection and testing of some products and inconsistent assessment of fees.”
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