The Department of Trade and Industry (DTI) has eliminated provisional safeguard measures on imports of reflective, tinted and clear float glass.
The decision was recommended by the Tariff Commission (TC), which found such imports not injurious or a threat to the local industry with decline in first quarter 2020 import activities.
Through Department Administrative Order (DAO) 20-04, Trade Secretary Ramon Lopez ordered the immediate return to importers of cash bonds on shipments of reflective, tinted and clear float glass entered into or withdrawn from warehouses in the Philippines for consumption starting October 22, 2019.
DAO 20-04, signed by Lopez on July 17 and released on August 19, will take effect once the Bureau of Customs issues the relative order.
In July 2019, DTI asked TC to investigate the merits of imposing a definitive safeguard duty on importations of reflective, tinted, and clear float glass from various countries.
Acting under Section 7 of Republic Act (RA) No. 8800 or the Safeguard Measures Act, DTI had earlier conducted a preliminary investigation upon the petition of the sole float glass maker in the country, Pioneer Float Glass Manufacturing Inc.
The agency found increased imports of these products caused serious injury to the domestic industry, particularly in terms of declining market share, domestic sales, capacity utilization, production, employment, profitability and increased inventories.
DTI then implemented provisional safeguard duty in the form of cash bond amounting to P2,552 per metric ton (mt) for clear float glass and P2,835 per mt for tinted float glass, including reflective glass, for a period of 200 days.
The Commission, in its final report dated June 29, 2020, said that during the period of investigation (POI), clear, tinted and reflective float glass were being imported into the Philippines in increased quantities, both in absolute terms and relative to domestic production. The increases started in 2018 and were “considered recent, sudden, sharp, and of such magnitude that can be deemed significant.”
Imports by traders continued to grow significantly until 2019, but began to decline in the first quarter of 2020.
TC said the slowdown in the importation “is highly likely to continue in the near future as economic activities in the Philippines [are] foreseen to significantly contract as an economic consequence of the COVID-19 pandemic.”
Also due to the pandemic, TC said “there is a low likelihood of substantially increased exports to the Philippines of clear, tinted and reflective float glass” despite sufficient capacity and favorable market access.
Further, similar to other Philippine industries, the domestic industry’s performance will very likely deteriorate in the near future, again because of the pandemic, it continued.
Despite the deterioration in market shares, profitability of clear float glass operations, and inventory levels of tinted float glass, “there was no significant overall impairment in the position of the domestic industry during the POI that constitutes serious injury in accordance with RA No. 8800,” TC found.
“Causation has become moot and academic in view of the negative determination of the elements of serious injury and threat thereof to the domestic float glass industry,” it stated.
And since only one manufacturer makes float glass in the Philippines, TC said “imports will provide competitive discipline and discourage possible abuse of market power.”
In recommending the non-imposition of a safeguard measure, TC said it will force the domestic industry to innovate, implement efficiency- and productivity-enhancing measures, and increase plant capacity in the “new normal.”
It will also enhance consumer welfare gains by expanding consumer choice, and spare consumers from the increase in prices that can be expected from the imposition of a safeguard measure.
Moreover, it is in line with the Association of Southeast Asian Nations Declaration and Statements on COVID-19, which aims to keep the market open to help sustain regional supply chains and improve stability of the regional economy, including assisting businesses suffering from the impact of COVID-19.