THE Philippines will continue slapping special safeguard duties (SSG) on imported coffee products, particularly instant coffee, as long as the items are below the country’s trigger price to extend necessary protection to local farmers.
This was Manila’s response to the query of Jakarta in a recent World Trade Organization Committee on Agriculture meeting regarding the Philippines’s imposition of SSG on imported coffee products.
SSG duties is a trade mechanism that a country can impose on imported products that fall below a so-called trigger price
by slapping additional duties in order to protect domestic output against unfair market price competition.
The Philippines imposes a price-based SSG on imported coffee products, a mechanism it started implementing in 2018 after the government saw a surge in coffee imports, which are priced way below the trigger price of the country.
“We have already conveyed to Indonesia that in accordance with Article 5.1 of the Agreement on Agriculture, SSG may be invoked on an SSG-eligible product if its CIF [cost, insurance and freight] import price falls below the trigger price. The trigger price for instant coffee was among those provided in the Philippines’s up-front notification in document G/AG/PHL/27 in 2002, which is the basis for the imposition of price-based SSG,” Manila said.
Manila noted that it has been imposing price-based SSG on instant coffee since August 2018 given the fact that there are still imports that are below the trigger price of P203.74 per kilogram.
“For as long as imported instant coffee arrives in the Philippines at a price lower than the trigger price, the SSG will continue to be applied on this product in accordance with the rules of the Agreement on Agriculture,” Manila said.
Jakarta has long been complaining about Manila’s SSG on imported coffee products, arguing that Indonesia’s exports of these items to the Philippines have been “adversely affected.”
In previous WTO CoA meetings, Indonesia claimed that the Philippines’s trigger prices of coffee products are incorrect and should be just P154.85 per kilogram instead of P203.74 per kilogram. (Related story: https://businessmirror.com.ph/2019/06/28/phl-stands-pat-on-ssg-for-instant-coffee-imports/)
Local coffee makers such as Nestlé Philippines Inc. earlier argued that the SSG slapped by Manila on imported coffee products will ensure that Filipino planters will continue to have a ready market for their produce. (Related story: https://businessmirror.com.ph/2019/03/18/ssg-levels-playing-field-for-local-coffee-makers-farmers/)
Nonetheless, the Philippines told the WTO CoA that it “stands ready to further discussing this issue with Indonesia,” and it remains “remain committed to addressing this matter in the appropriate forum.”
Indonesia recently inquired regarding the status of the Philippines’s SSG on coffee imports, after it claimed that it has already raised the price of its coffee exports above Manila’s trigger price.