Truck makers buck proposal to slash tariff

MANILA, Philippines - The Truck Manufacturers Association (TMA) is bucking proposals to implement a tariff reduction next year.

In a position paper submitted to the Tariff Commission (TC), TMA said they are not in favor of the gradual reduction of the tariff under the ASEAN Korea Free Trade Agreement (AKFTA) and the ASEAN China Free Trade Agreement (ACFTA).

“The deferment of tariff reduction will certainly provide the government with policy space to adopt safety nets and to build its capabilities, as well as allowing a sheltering period for much needed measures for our industry sector,” the TMA stated.

TMA urged that the existing MFN (most favored nation) duty rates (currently at 15 percent, 20 percent and 30 percent) be maintained until the end of 2016 for AKFTA and 2018 for ACFTA. The group said the tariff reduction starting 2012 for both FTAs is premature and will have serious implications on the truck and bus manufacturing industry.

According to the group, significant structural and regulatory reform including capacity building for regulatory personnel are still needed to prepare for open trade.

The group added that the magnitude and scale of technical smuggling on imported trucks buses, whether brand-new or used, continues to be very significant.

Pending issues with the Department of Environment and Natural resources/Environmental Management Bureau regarding emission standards between used and brand-new trucks and buses remain unresolved until today. Likewise, conflicting regulations in used motor vehicles in general are yet to be reconciled or harmonized.

Likewise, the manufactured process involved in truck and bus manufacturing is very labor intensive, making the industry important to the country and should therefore be fully supported and promoted by the government. Truck and bus building also provide significant supply opportunities on fabricated parts and sub-assemblies which benefit local parts manufacturers.