NEDA moves to reverse suspension of tariff rates for next year

The National Economic and Development Authority (NEDA) wants to reverse the Cabinet decision to freeze tariff rates in 2001 at present levels, a move that has created a rift between NEDA and the Department of Trade and Industry.

A source from the Cabinet committee on Tariffs and Related Matters (TRM) told reporters that with resigned Trade Secretary Manuel Roxas II now out of the picture, NEDA has renewed efforts to recall the decision and push through with the reduction of tariffs on schedule.

The TRM had agreed to suspend all tariff rates in 2001 at the prodding of Roxas who was acting in support of various industry lobby groups seeking continued tariff protection from imports.

Roxas had pushed aggressively for the postponement of the 2001 tariff reduction schedule although the common position was to still keep within the 2004 deadline for the reduction of tariffs on all imports except sensitive products, within the 0-5 percent range.

The TRM’s decision was intended to give the industry and agriculture sector a breather in 2001 and maintain all rates at 2000 levels but this would mean that the reduction in 2004 would be implemented on a sudden-death basis.

With Roxas gone, however, the source said NEDA had renewed its opposition to the decision to suspend the scheduled tariff reduction in 2001, asking the TRM to table the policy for another round of discussion.

The source said NEDA remains adamant about the suspension and was aggressively opposed to deviating from the country’s commitment to continue the gradual reduction of tariffs on a yearly basis.

The source revealed that the TRM could end up discussing the proposal all over again. He said the decision could be thrown back to the technical working group of the TRM for another round of debate before making its way back to the Cabinet level.

NEDA has been consistently in favor of a gradual reduction in tariffs to allow domestic industries to slowly prepare for the competition with imported goods.

The sudden-death approach, the economic body said, would only lull manufacturers into a false sense of security before being forced to face the shock of competition when tariffs are suddenly dropped as per the schedule of the World Trade Organization.