DEPARTMENT OF TRADE AND INDUSTRY
PHILIPPINES
IN THE MATTER OF THE APPLICATION FOR
GENERAL SAFEGUARD MEASURES AGAINST
THE IMPORTATION OF FIGURED GLASS
FROM VARIOUS COUNTRIES
(Safeguard Investigation No. 01-2003)
ASAHI GLASS PHILIPPINES, INC. (AGP)
Protestant
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ORDER
On 30 March 2004, the
Department of Trade and Industry received the Tariff Commission’s Formal
Investigation Report on the application for general safeguard measure against
the importation of figured glass (H. S. Code 7003.1290 now AHTN Nos. 7003.1220
and 7003.1290 and H.S. Code 7003.1990 now AHTN Nos. 7003.1920 and 7003.1990)
from various countries.
The Commission concluded that, in accordance
with RA 8800 and the WTO Agreement:
- AGP
is the sole domestic manufacturer of tinted clear figured glass in the
Philippines.
-
Locally produced figured glass is “like product” to imported figured glass.
-
Figured glass is being imported into the Philippines in increased quantities,
both in absolute terms and relative to domestic production, in 2002.
- The
industry suffered and is suffering significant overall impairment in its
condition in terms of loss of market share; inability to increase production
and sales volume despite increase in demand; and substantial financial losses
in operations.
-
While there are other factors which contributed to the overall impairment in
the position of the domestic industry, cheap imports in increased quantities
were the major cause of serious injury to the domestic figured glass industry.
The existence of a causal
link between increased imports of figured glass and serious injury to the
domestic industry having been established, the Commission recommended the
imposition of definitive general safeguard measures in the form of tariff-rate
quota and specific duty to be imposed on imports of figured glass. The measure
shall be effective for three (3) years starting 13 October 2003, i.e., the date
the provisional measure took effect.
The current inquiry was
conducted in accordance with the requirements of the Safeguard Measures Act and
the procedures prescribed by the WTO Agreement on Safeguards and Article XIX of
GATT 1994, i.e. determination of existence of unforeseen developments and effect
of obligations, including tariff concessions which led to the increased imports
and resulting injury to the local industry. Although these circumstances need
not be demonstrated for the reason that figured glass is not the subject of any
Philippine concession under the WTO Agreement, current inquiry was governed by
the national legislation (RA 8800) and the terms and conditions of the Agreement
on Safeguard Measures.
AGP was affected by the slow
down in demand for glass products due to the excess capacity within the Asian
region. Such excess regional supply found its way into smaller markets like the
Philippines. The increased cheap imports in significant quantities from Asian
sources consequently eroded the local industry’s market share. Moreover, the MFN
tariff rate of the Philippines is found to be lower and has declined at a faster
rate than its neighbors which made the Philippine market more attractive to
imports. The increased imports is recent, sharp and significant. These
circumstances comprised the unforeseen development under Article XIX of GATT
1994.
Section 5 of RA 8800 states:
“The
Secretary shall apply a general safeguard measure upon a positive final
determination of the Commission that a product is being imported into the
country in increased quantities, whether absolute or relative to the domestic
production, as to be a substantial cause of serious injury or threat thereof
to the domestic industry; however, in the case of non-agricultural products,
the Secretary shall first establish that the application of such safeguard
measures will be in the public interest.”
Accordingly, the DTI has
reviewed the Commission’s findings and recommendations and has established that
the application of general safeguard measures shall be in the public interest.
IN VIEW THEREOF,
and in accordance with Section 13 of RA 8800, the DTI hereby orders the
imposition of a definitive general safeguard duty in the amount of P2,655/MT for
the first year of its implementation. Section 15(3) of RA 8800 provides further
that “an action described in Section 13(a), (b) or (c) that has an effective
period of more than one (1) year shall be phased down at regular intervals
within the period in which the action is in effect”. Thus, the definitive
safeguard duty shall be at P2,520/MT for the second year and P2,394/MT for the
third year of its implementation. Considering that the TC findings indicated
that the major cause of injury to the local industry are the cheap priced
imports from the major source countries, the amount of the definitive general
safeguard duty were computed to a level that will provide adequate protection to
the domestic industry while it is taking the necessary adjustment measures to
achieve efficiency. The first year of implementation of the definitive general
safeguard measure shall include the period in which the provisional in which the
provisional safeguard duty took effect i.e. 13 October 2003, the date of the
issuance of Customs Memorandum Order 24-2003. The measure shall be effective
from the date of the issuance by the Bureau of Customs of the relevant customs
Memorandum Order (CMO) or 15 days after the publication of this Order in two (2)
newspapers of general circulation, whichever comes earlier.
Pursuant to Section 13 of RA
8800 and Rule 13.1.d of its IRR, “a general safeguard measure shall not be
applied to a product originating from a developing country if its share to total
Philippine imports of the said product is less than three percent (3%):
Provided, however, that developing countries with less than three percent (3%)
share collectively account for not more than nine percent (9%) of the total
Philippine imports of the product concerned”. The countries listed in Annex
A are excluded from the imposition of the definitive general safeguard measure
on figured glass. DTI drew up this list based on the import statistics for 2003.
Imports in 2003 from Taiwan, Korea and Hongkong, developing countries which are
regular sources of Philippine imports of figured glass, were found to be de
minimis or below the 3% threshold or collectively account for more than 9% of
the total Philippine imports, the definitive safeguard measure shall be applied
on such imports. DTI shall conduct an annual review of the Philippine imports of
figured glass and draw up the appropriate exemption lists for 2005 and 2006.
As provided further under
Section 13 of RA 8800 and its IRR, all cash bonds that may have been imposed on
shipments originating from countries listed in Annex A and which entered in or
are withdrawn from warehouses in the Philippines for consumption starting 13
October 2003, the date of the effectivity of CMO 24-2003, shall be immediately
returned to the concerned importer. Rule 13.3.c of the IRR of RA 8800 also
provides that: “In case a cash bond has been filed, the
same shall be applied to the safeguard duty assessed. In case of a negative
finding or if the cash bond is in excess of the definitive safeguard duty
assessed, the remainder shall be immediately returned to the importer within
then (10) calendar days from the date a final decision has been made: Provided,
that no interest shall be payable by the government on the amount to be
returned”
All importers of figured glass, regardless
of port of exportation, are required to secure a Certificate of Country of
Origin (CO) issued by the authorized agency/ office in the source country of
manufacture as authenticated by the Philippine Embassy/ Consulate thereat.
The notification and consultation
requirements of Article 12 of the WTO Safeguards Agreement and Section 17 of RA
8800 and its IRR shall be complied with.
Imports originating from ASEAN Member states
shall be governed by the provisions of Article 6 and 8 of the Agreement on the
CEPT Scheme.
The application of the definitive general
safeguard measure shall be monitored and reviewed in accordance with Rules 15
and 16 of RA 8800. Applicant AGP is also directed to comply with its adjustment
plan of 3 October 2003.
Let this Order be published in two (2)
newspapers of general circulation and let individual notices be sent to all
interested parties including the country members concerned.
SO ORDERED.
(Signed)
CESAR V. PURISIMA
Secretary
14 April 2004
ANNEX A
List of
Developing Countries Excluded from the
Imposition of Definitive Safeguard Measure
on Figured Glass
