For trade liberalization to succeed, international trade should be conducted in a spirit of fair play.
One of the mechanisms provided under the law of the World Trade Organization (WTO) to protect countries against unfair trade is the imposition of anti-dumping duties.
Dumping is defined as bringing a product onto the market of another country at a price less than the normal value of that product. “Dumping is condemned but not prohibited in WTO law. However, when the dumping causes or threatens to cause material injury to the domestic industry of a member, WTO law allows that member to impose anti-dumping duties on the dumped products in order to offset the dumping.†(Article VI of the GATT 19994 and the Anti-Dumping Agreement, The Law and Policy of the World Trade Organization by Peter Van den Bossche)
“The (Members) recognize that dumping… is to be condemned if it causes or threatens material injury to an established industry in the territory of a (Member) or materially retards the establishment of a domestic industry.†(Article VI, GATT 1994)
It is precisely because of the determination of material injury that is caused or threatened to be caused to our domestic industry that the Department of Agriculture ordered the imposition of dumping duties on imports of wheat flour from Turkey.
The order was based on a complaint filed by the Philippine Association of Flour Millers (PAFMIL) which claimed that “local flour millers have been driven to the losing end of the battle against Turkish flour which is being dumped at domestic prices even lower than their cost of raw material which is wheat.â€
Following preliminary investigation and based on data/information gathered, the DA imposed a provisional duty thru the Department of Finance-Bureau of Customs (DOF-BOC) against the product under consideration and has transmitted the case to the Tariff Commission for formal investigation.
The DA, after a thorough examination of the evidence, established the existence of a threat of material injury to the local industry caused by the importation of alleged dumped wheat flour from Turkey.
According to the department, there was an increase in shipments of wheat flour to the Philippines, particularly for the period of 2011 and 2012, with most of it coming from Turkey. In 2012, wheat flour imports accounted for 11.79 percent of total supply of which 9.44 percent came from Turkey. This was a marked increase to the 6.12 percent share of imports to total supply in 2010.
The DA said that there was a decrease in profitability of PAFMIL members during the period which may be attributed to their inability to proportionately increase their selling price with the increase in their production cost.
Considering these, DA said there exists sufficient evidence that justifies the initiation of a formal investigation on the petition of PAFMIL. This report showed that on the basis of available documents, DA determined that dumped wheat flour in the country is substantially causing a threat of injury to the domestic producers of wheat flour. In particular, the surge of imports of dumped wheat flour from Turkey may cause a continuous decline in market share and profitability of PAFMIL.
The major importers of Turkish flour are: Mountain Glory, Reach High, Arvin International, Suncrest, Rebisco, MCT Trading, ATMA International, Great Crescent, Malabon, Kemicom, and Danvil Commercial.
The major exporters of Turkish flour, on the other hand, are Kale Madencilik, Unay Gida, Dost Gida, Tekinak Gida, Erisler Gida, Yorukog Ullari, Tekirdag, Doruk Marmara, Ulusoy Un, Turun Gida, Karahan, Eksun Gida, Akduy Gida and Ulas Gida.
There is also the added issue of substandard quality of imported wheat flour, including that coming from Turkey, and this is something that our Food and Drug Administration should look into.
For comments, email at philstarhiddenagenda@yahoo.com