The Tariff Commission (TC) is not recommending the imposition of a general safeguard measure on imports of reflective, tinted, and clear float glass.
In a summary report of its investigation dated June 30, TC said it has terminated its formal investigation and recommends no definitive safeguard measure on importations of such products “considering the negative determination of the elements of serious injury and threat”.
The Department of Trade and Industry (DTI) in July 2019 requested TC to conduct an investigation on the merits of the imposition of a safeguard duty against imports of reflective, tinted, and clear float glass from various countries. This followed DTI’s preliminary investigation petitioned by the country’s sole float glass maker, Pioneer Float Glass Manufacturing Inc.
Acting under Section 7 of Republic Act (RA) No. 8800 or the Safeguard Measures Act, DTI found increased imports of the 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.
READ: DTI imposes safeguard duty on float glass imports
In its final report dated June 29, TC said during the period of investigation (POI), clear, tinted and reflective float glass are being imported into the Philippines in increased quantities, both in absolute terms and relative to domestic production. The increases in the volumes of imports starting in 2018 “are considered recent, sudden, sharp, and of such magnitude that can be deemed significant.”
TC said imports of clear, tinted, and reflective float glass by traders continued to grow at a significant rate until 2019 but began to decline in the first quarter of 2020.
It added that the slowdown in the imports of clear, tinted, and reflective float glass “is highly likely to continue in the near future as economic activities in the Philippines is foreseen to significantly contract as an economic consequence of the COVID-19 pandemic.”
Also due to the economic impact of the pandemic, TC said despite sufficient capacity and favorable market access, “there is a low likelihood of substantially increased exports to the Philippines of clear, tinted and reflective float glass.”
Further, TC said that similar to other Philippine industries, there is a high likelihood that the domestic industry’s performance will deteriorate in the near future as again one of the economic consequences of the pandemic.
Despite the deterioration in several factors such as 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.”
“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,” TC stated.
Since there is only one manufacturer of float glass in the Philippines, TC said “imports will provide competitive discipline and discourage possible abuse of market power.” It added that the “non-imposition of a safeguard measure will force the domestic industry to innovate, implement efficiency- and productivity-enhancing measures, and increase plant capacity in the “new normal”.
The non-imposition of a safeguard measure will also enhance consumer welfare gains by expanding consumer choice, and will also spare consumers from the increase in prices that can be expected from the imposition of a safeguard measure, TC stated.
Moreover, TC said non-imposition of safeguard measures is in line with the Association of South East 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.
