RP not keen on lowering tariff rates by 2004

The Philippines, along with a couple of other ASEAN member countries, is reportedly not too keen on immediately lowering its tariff rates to a uniform five percent by 2004 under the Most Favored Nation (MFN) commitment. The MFN rates would apply to countries outside of the ASEAN Free Trade Area.

The Philippines is not confident that its industries can effectively compete with other countries, especially China.

While the Philippines may be able to protect some industries under a so-called exclusion list (meaning the MFN rates would not immediately be applied to those industries), government believes that the reduction in MFN rates should be gradual.

Trade and Industry Secretary Manuel Roxas II has reportedly sought a review of the country’s commitment to lower its MFN rates since the commitment was not made by him but by his predecessors.

However, Roxas’s opinion is not shared by the National Economic and Development Authority (NEDA), which espouses the view that high tariff walls only penalize consumers.

The NEDA only agrees to provide tariff protection for competitive local industries.

Roxas chairs the Tariff and Related Matters (TRM) committee which reviews any request for tariff protection. However, there are 12 members in the TRM and the DTI can easily be outvoted.

Several local industries have been petitioning for continued tariff protection including the automotive and petrochemical industries.