DTI bows to TC decision vs safeguard duty on auto imports

Imported vehicles at Batangas port. Photo courtesy of Asian Terminals Inc.
  • The Department of Trade and Industry will respect a Tariff Commission investigation that recommended non-imposition of safeguard measures on auto imports
  • The TC found completely built-up passenger cars and CBU light commercial vehicles were not imported in increased quantities
  • DTI earlier imposed provisional safeguard duties on the vehicles after determining their increased importation caused serious injury to the domestic industry

Trade Secretary Ramon Lopez said his agency would respect the Tariff Commission’s (TC) decision against the imposition of safeguard measures on auto imports.

In its final report released on July 23, the Tariff Commission (TC) said completely built-up (CBU) passenger cars and CBU light commercial vehicles were not imported in increased quantities during the period of investigation covering 2014 to 2020. This being so, TC said “the determination of serious injury or threat thereof, causation, and unforeseen developments has become moot and academic.”

The TC in a July 21 notice also suspended a public hearing on the case after having reached its findings.

Following a request from DTI, the TC last February began a formal investigation on the merits of imposing safeguard duty on imports of CBU passenger cars and CBU light commercial vehicles.

READ: Customs order implements safeguard duties on autos

The Bureau of Customs earlier this year implemented a DTI order imposing provisional safeguard duties in the form of a cash bond amounting to P70,000 for each imported passenger car and P110,000 for each imported light commercial vehicle. DTI in its preliminary investigation found that increased imports of these vehicles caused serious injury to the domestic motor vehicle manufacturing industry.

DTI undertook the preliminary determination for safeguard measures following a petition filed in 2019 by the Philippine Metalworkers Alliance, a national union of automotive, iron and steel, electronics, and electrical sectors, including affiliates composed of key players in the automotive industry.

Under Republic Act No. 8800, or the Safeguard Measures Act, any person, whether natural or juridical, belonging to or representing a domestic industry may file with the DTI secretary a verified petition requesting action to remedy the serious injury to the domestic industry caused by increased imports of a like or directly substitutable product.

DTI’s preliminary determination found that critical circumstances existed where delay in imposing the measure would cause the industry damage difficult to repair.

DTI said the domestic industry suffered declining market shares, sales, and employment even as inventories accumulated. It also sustained increasing losses over the period that affected its cash flows and ability to invest. In addition, it faced excess and increasing production capacity in countries such as Thailand, Indonesia, and China.