The Department of Trade and Industry (DTI) will likely adjust the additional levy recommended by the Tariff Commission (TC) on imported newsprint, in view of the impact of the measure on the downstream industries.
Trade Undersecretary for Industry Development and Trade Policy Adrian S. Cristobal told reporters that the recommendation of the TC for a P2,470-per-metric-ton (MT) safeguard measure on newsprint imports will be adjusted by the DTI head, taking into consideration the effect on downstream industries.
“The secretary is now reviewing the findings and recommendations of the commission; he’s bound to follow the finding that there has been serious injury, but the recommendation of the rate of duty can be modified or tweaked,” explained Cristobal. While the trade official kept mum on whether the adjustment will be beyond or below the recommended rate of the TC, Cristobal underlined that the public interest will be the foremost consideration of the DTI.
To recall, the TC released its findings and recommendations last February on the petition of the Trust International Paper Corp. (Tipco) to impose a safeguard measure on imports of newsprint. Safeguard measure is one of the trade remedies that may be exercised by a country to support local manufacturers if it finds that imported counterparts are causing damage to the domestic industry.
The safeguard measure affects all trading partners supplying the imported good, except developing countries whose exports are less than 3 percent of total import volume.
Tipco, which accounts for 87 percent of the country’s domestic production, alleged that rising imports of the commodity had caused them serious injury in terms of market share, profitability and domestic sales, among others.
The TC, finding a link between the firm’s declining operations and the surge of imports in 2012 and the years following, recommended a P2,470 per MT specific duty on the imports of the commodity, which will be applied from 2015 to 2018.
The equivalent ad valorem rate will vary depending on the value of the shipment per country. But on average, the P2,470 will mean an additional duty of 9.4 percent on imports.
The decision is bound to impact trade with South Korea and the United Kingdom, the top 2 suppliers of imports of newsprint. South Korea, from January to September of 2014, took up 88 percent of the total volume of newsprint imported by the Philippines, while the UK’s share was at 5 percent.
According to the TC report, China and Indonesia’s exports of newsprint are exempted from the additional duty as they were classified as developing nations whose imports of newsprint accounted for less than 3 percent of the Philippines’s total imports.
The findings of the TC have already irked the domestic print-media industry, as imports of newsprint have been surpassing domestic production since 2012, and most print media stakeholders depend on imports.
In an open letter to trade chief Gregory L. Domingo in March, the United Print Media Group sought the dismissal of the petition for safeguard duty, warning that the prices of educational materials will increase and operational costs of newspapers will spike as well. Domingo has so far declined to expound on his review of the commission’s findings.