Favila asks Roxas to help plug loopholes in Safeguard Measures Act

Trade and Industry Secretary Peter B. Favila has sought the help of former Trade Secretary and now Sen. Manuel A. Roxas III to help enact legislation that would strengthen, remove any ambiguity and plug loopholes in the existing Safeguard Measures Act.

According to Favila, he had met last week with Senator Roxas to discuss how the Safeguard Measures Act could be strengthened.

Roxas, who had championed the Safeguard Measures Act during his stint at the Department of Trade and Industry, Favila said, was supportive of the need to strengthen and tighten the Safeguard Measures Act.

Because of loopholes in the Safeguard Measures Act, the Supreme Court recently ruled negatively in the application of safeguard measures on cement and steel imports.

Local industries are now fearful that without the ability to implement the Safeguard Measures Act, the country could be swamped by "dumped" products.

The Safeguard Measures Act was specifically envisioned to offer some protection for local industries in cases where damaged to the affected industry could be proven due to the trade practice of "dumping."

Dumping in trade parlance is the export and sale of products by a country at prices lower than the prevailing domestic price in the country of origin.

Through dumping, the exporting country can effectively "kill" the local competition in the importing country unless the importing country’s government has adequate safeguard measures to check such practices.

During the term of Roxas at the DTI, he had used the Safeguard Measures to impose a safeguard duty on imported cement after local cement manufacturers were able to prove to him that the cement imports were being dumped and adversely affecting the viability of the local cement industry.

However, due to an ambiguous interpretation of who has the final say on the imposition of the safeguard measures, cement and steel importers have been able to argue for a favorable ruling from the SC that now prevents the use of the Safeguard Measures Act.