Lawyers study how DTI can overrule Tariff Commission

Even though the Supreme Court has made a final ruling on the cement safeguard issue, cement importers may have to face another hurdle as Trade and Industry Secretary Peter B. Favila is ordering the Department of Trade and Industry’s (DTI) legal experts to study how the DTI can overrule decisions of the Tariff Commission in cases where local industries clearly need protection.

According to Favila, he agrees with the position taken by former Trade Secretary and now Sen. Manuel A. Roxas Jr. that the DTI Secretary has the power to set aside decisions made by the Tariff Commission if the DTI’s own findings clearly show that a particular industry needs protection.

Favila feels that there is a need to make the law clear and doing so may require legislative amendment.

The new DTI Secretary acknowledged that because of the possible ambiguity in the law, there are different interpretations and the Supreme Court has given its own interpretation to the possible detriment of the local cement industry.

But in the same vein, local cement importers are also now fearful that while they have enjoyed a clear victory in the Supreme Court, the new DTI head is about to change the rules again.

Local cement manufacturers had been able to successfully present to the DTI way back in 1999 that imported cement was being "dumped" in the country.

"Dumping" in trade parlance means that the product is being imported and sold at a price lower than its actual production cost in its country of origin, primarily to kill competition.

However, while the DTI was successfully convinced by local cement manufacturers, the Tariff Commission, which is an independent body that review tariff issues, felt otherwise and found no need to impose safeguard duties on imported cement.

The Tariff Commission’s decision was overturned by Roxas and a safeguard duty of P20.60 per 40 kilogram bag was imposed starting in 2001.

However, one local cement importer, Southern Cross Cement Corp. (SCCC), decided to question the legality of the safeguard duty and took the issue to court.