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DEPARTMENT OF TRADE AND INDUSTRY 1. The output of the applicant (AGP) constitutes a major proportion of the total domestic production of glass mirrors. 2. Locally produced unframed glass mirrors are “like products” to imported unframed glass mirrors. On the other hand, imported framed glass mirrors are “directly competitive” with the locally produced unframed mirrors. 3. Glass mirrors were imported into the Philippines in significantly increased quantities, both in absolute terms and relative to domestic production, during the final year of investigation (POI). 4. 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; underutilization of capacity; substantial loss in operations; and decline in productivity. 5. While there might be other factors which contributed to the overall impairment in the position of the domestic industry, cheap import in increased quantities were the dominant cause of serious injury to the domestic glass mirror industry. The existence of a causal link between the increased imports of glass mirrors 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 import of glass mirrors. 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 reason that glass mirrors is not the subject of any Philippine obligation or tariff 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 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 as 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. Thus, the DTI has decided that the definitive general safeguard measure shall be imposed on all importations of “copper-based” mirrors. 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 P5,110/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 amount of the definitive general safeguard duty shall be at P4,855/MT for the second year and P4,615/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 undertaking 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 safeguard duty took effect i.e. 13 October 2003, the date of the issuance of Customs Memorandum Order No. 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 of its Implementing Rules and Regulations, “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 thus, excluded from the imposition of the definitive general safeguard duty on glass mirrors. DTI drew up this list based on the import statistics for 2003. Imports in 2003 from the following developing countries which are regular sources of Philippine imports of glass mirrors were found to be de minimis or below the 3% threshold: Vietnam, Malaysia, Singapore, India and Korea. In the event that import originating from the said countries individually reach the 3% threshold or collectively account for more than 9% of the total Philippine imports, the definitive general safeguard measure shall be applied on such imports. DTI shall conduct an annual review of the Philippine imports of glass mirrors an 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 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 ten (10) calendar days from the date of 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 glass mirrors, 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 a 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 Articles 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
ANNEX A List of Developing Countries Excluded from the Imposition of Definitive Safeguard Measure On Glass Mirrors
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