Taiwan to punish RP cement with 65% import duty

The Taiwan International Trade Commission (ITC) has announced its preliminary determination that imports from the Philippines and Korea have caused injury to the Taiwanese cement industry.

The Taiwan Ministry of Finance will compute the "dumping margin" and set the level of anti-dumping duties. If imposed, the antidumping duties will be in effect for the next five years. Five Taiwanese manufacturers are asking for a 65 percent dumping margin to be imposed on all cement imported from the Philippines.

The announcement came as a surprise to Philippine cement producers given that exports of Philippine cement to Taiwan accounted for less than four percent of Taiwan’s total cement consumption during 2000.

Five Taiwanese producers led by Taiwan Cement Corp. (TCC) have filed the anti-dumping case in July of this year. They accused cement imports from the Philippines to have lowered prices of cement and to have thus caused injury to the Taiwanese cement industry.

Philippine producers have argued that other factors are responsible for the decline in the price of cement in Taiwan. They said that the firing up of TCC’s six million ton per year mega-plant in Hoping, adding new supply accounting for 32 percent of the country’s demand is largely to blame for the lower cement prices and that Philippine imports are being used as a scapegoat in order to close the Taiwan market to foreign competition.

Philippine producers also pointed out to the Taiwanese ITC that the slowdown in the Taiwanese economy over the last year leading to a 46 percent drop in the value of the Taiwan Weighted Stock Market Index (TWII) has brought construction to a virtual halt and has substantially contributed to the drop in prices.

In addition, Philippine producers explained that the rivalry between Taiwanese cement manufacturers in the East and cement producers in the West of Taiwan that has been on-going for the last two years is also fundamentally the cause of lower cement prices in Taiwan. Only five out of the 11 cement producers in Taiwan have filed the anti-dumping complaint. These five are all situated in the East. Aside from small traders, imports of cement are all undertaken by Taiwanese producers of cement in the West, none of which are applicants in the anti-dumping case. Without the ability to import cement, Western manufacturers will be forced to source their cement from the Eastern manufacturers or to go bankrupt since their limestone mining rights are soon expiring.

"Japan, which accounts for 70 percent of cement imports in Taiwan, is peculiarly not a party to the anti-dumping case," said the Philippine Cement Manufacturers Corp. (Philcemcor). "That tells us that the five Taiwanese firms which are pursuing the case may be motivated to single out the Philippines and Korea as scapegoats for their current situation, whether it is self inflicted or not," said Philcemcor."

We are saddened to see that the investigation in Taiwan is moving forward at lightning speed and that the Taiwanese government seems to be supporting its local producers in light of overwhelming evidence of the Philippine producers’ innocence while our applications for safety nets against dumping and surging imports that today claim 35 percent of our market continues to be debated over," said Philcemcor.

Philcemcor filed an anti-dumping case against TCC in March 2000 and a Safeguard Measures case for relief from surging imports in January 2001. The Department of Trade and Industry (DTI) has not been able to act on the safeguards application due to an injunction that was issued by Judge Floro Alejo of the Valenzuela Regional Trial Court barring all government agencies from enforcing the Safeguard Measures Act (RA 8800) on the grounds that the law is unconstitutional.