IMPOSING safeguard measures on imported automobiles is going against the regional bloc’s free trade agreement (FTA), the local distributor of Toyota vehicles said, noting that the Philippines should consider this before implementing additional tariffs.
“The safeguard is very much contrary to the spirit of the Asean (Association of Southeast Asian Nations) economic zone which promotes the free movement of goods,” GT Capital Auto Dealership Holdings Inc. Chairman Vicente Jose Socco told reporters on the sidelines of a briefing in Taguig last week.
“The safeguard should be considered in line with the general framework of the Asean economic zone,” he added.
This, after the recent announcement that the Department of Trade and Industry (DTI) was reviewing the application for safeguard measures on auto imports amid surge in inbound shipments.
The DTI said that its Bureau of Import Services unit was assessing the proposal filed by the Philippine Metal Workers Alliance, a labor group registered with the Department of Labor and Employment.
Data showed the total number of imported brand-new motor vehicles that entered the country between 2014 to 2018 reached more than a million units, of which 428,000 units came from Thailand; 312,000 from Indonesia; and 101,000 units from South Korea.
Should the safeguard measures be in place, Socco said that Toyota, along with other car manufacturers, will be impacted, noting that 15 percent of its imports came from Thailand as of October this year.
“[O]ur strategic advantage is that we have production bases in different countries. So we have Thailand, Indonesia, Vietnam, Malaysia, Philippines,” he added.
Socco, however, said that the “government, of course, has that prerogative and we will comply as the government decides.”
GT Capital Holdings Inc. President Carmelo Maria Luza Bautista said restricting automobile imports from Thailand “doesn’t make sense,” referring again to the free trade deal in the region.
Trade Secretary Ramon Lopez recently said the country may restrict all vehicle imports from Thailand if it will not abide by the World Trade Organization (WTO) ruling on valuation for cigarette shipments.
In July, the WTO ruled in favor of the Philippines’ claim that Thailand violated the policies on valuation for cigarette shipments through under-declaration. The WTO mandates that customs value of imported goods be measured at transaction value or the “price actually paid or payable for the goods when sold for export to the country of importation.”
“We import from Toyota. We also export to them. [There is a] balance,” Bautista said.
Toyota Motor Philippines Corp. is the automobile industry leader with 43.25-percent market share, selling 130,520 units in the first ten months that is 5 percent higher than the year-earlier 124,329 units.