House backs freeze on tariff reduction

The House special committee on globalization is set to adopt measures on the planned tariff reduction in support of labor, farmer and industry groups that are opposed to the Common Effective Preferential Tariffs (CEPT) of the ASEAN Free Trade Area (AFTA) and the NEDA-imposed unilateral tariff reduction program.

During a public hearing last week, Rep. Herminio G. Teves, chairman of the House special committee on globalization, said he will introduce measures that would temporarily hold back plans to bring down by next year tariff rates on a wide range of imported products covered by the CEPT-AFTA.

Teves said the Philippines must first ensure that other countries, especially the industrially developed economies, should bring down their tariffs and eliminate protection before the country embraces a general policy of tariff reduction.

"We must insist on high tariffs first until we are sure that the developed countries are willing to bring down their tariffs and eliminate subsidies that protect their industries," Teves said.

Teves made the statement after various groups that attended the committee hearing had expressed concern over the continuing policy of the government to reduce tariffs on imported goods to the detriment of local industries.

Representatives from various farmer and industry groups told the committee that the Philippines had been accelerating tariff reductions in agricultural products "ahead of bound rates and at lower levels than our peers at the WTO."

They said this has resulted in the collapse of prices of the country’s agricultural products, such as coffee and sugar, up to one-half of what they were in 1993.

According to them, the Tariff Commission had lowered ad-valorem taxes to levels below what the country committed at the WTO, under pressure from both importers and multinationals.

Last week, objections from various local industry and agriculture sectors, labor and farmers have intensified as the countdown begins when the country will have to reduce tariffs for AFTA products zero to five percent by January next year under the CEPT-AFTA agreement and for non-AFTA products to zero to five percent by 2004 under the NEDA-imposed tariff reduction scheme.

Even industries that are at odds have identified tariff reductions as the root cause of their problems. In an unprecedented move, the petrochemical and plastics industries have set aside their differences to unite against the tariff distortions caused by tariff reduction programs.

Labor and peasant organizations under the Fair Trade Alliance (FTA) have also agreed to launch a campaign against the CEPT and NEDA’s tariff reduction program. They held a rally at the opening of the AFTA senior economic officials’ meeting on Aug. 5, 2002 at Pasig City where they dumped rotting crops and products and coffins representing the dying local industries and agricultural producers.