PHL not opening up enough — US
April 10, 2015 at 14:19
Posted on April 08, 2015 10:59:00 PM
By Daryll Edisonn D. Saclag, Reporter
THE PHILIPPINES has made little progress in terms of opening up its market further to American goods and services, according to the 2015 National Trade Estimate report published annually by the Office of the United States Trade Representative (USTR).
The Washington D.C.-based agency, in the 444-page report that was released last April 1 and devoted seven pages to the Philippines, said American exporters cited the same concerns they had raised previously such as those relating to the government’s import policies, intellectual property rights (IPR), and regulatory barriers.
The report provides an inventory of “significant foreign obstacles” affecting US exports in various countries, a list that will guide Washington in its trade negotiations. “Unwarranted barriers to selling our world-class goods and services abroad hurt American workers, farmers, ranchers, and businesses large and small. USTR’s efforts to spotlight and address these barriers to Made-in-America exports around the world are aimed at helping businesses of all sizes grow their exports and support more American jobs,” the agency said in a statement on its Web site.
Regarding alleged trade barriers imposed by the Philippines — the US’ 33rd largest export market — the USTR said the country has not yet issued an executive order implementing the concessions it had made last year in return for the extension of its quantitative restrictions on rice.
The World Trade Organization last July granted the Philippines’ application to maintain barriers aimed at protecting local farmers up to 2017.
In return, the country had agreed to lower its tariff on imported rice to 35% from 40% and increase the minimum access volume quota to 805,200 metric tons (MT) from 350,000 MT.
“The Philippine government has yet to issue an executive order implementing these changes,” the USTR noted.
Moreover, the country was criticized for also having “high tariffs” on finished automobiles and motorcycles. The USTR cited the 30% tariff the government imposes on imported passenger cars, as well as the 20-30% levy on vehicles used to transport goods.
The trade office also said implementation of the Government Procurement Act of 2003 “remains inconsistent.”
“US companies have expressed concern about delayed procurement decisions and payments, as well as differing interpretations of the procurement law among Philippine government agencies,” the USTR said in its report.
“All government procurements of imported equipment, materials, goods and services require a countertrade requirement of 50% of the value of the supplier’s supply contract, amounting to at least $1 million, and with penalties for nonperformance of countertrade obligations,” it added, accusing the government of favoring Philippine firms and locally produced materials.
In terms of IPR regime, the USTR said rights holders noted an improvement in effectiveness and coordination of Philippine enforcement agencies, such as the Intellectual Property Office of the Philippines.
However, the USTR said American firms continued to report an increase in Internet-based piracy and trade in counterfeit drugs.
Provisions in the country’s patent law were also said to “preclude the issuance of patents on certain chemical forms unless the applicant demonstrates increased efficacy.”
The Philippine justice system likewise remains “inexperienced” in dealing with IPR-related cases, the USTR added.
Lastly, the agency said corruption in the country remains “pervasive”, discouraging American firms from doing business here.
“Both foreign and domestic investors have expressed concern about the propensity of Philippine courts and regulators to stray beyond matters of legal interpretation into policymaking and about the lack of transparency in judicial and regulatory processes,” read the report.
“Concerns also have been raised about courts being influenced by bribery and improperly issuing temporary restraining orders to impede legitimate commerce.”
Philippine officials were not available for comment.
John D. Forbes, senior adviser at the American Chamber of Commerce of the Philippines, agreed with the report, noting the Philippines is “less open to US goods and services than vice versa.”
“We hope next year’s report can report enactment of the CMTA (Customs Modernization and Tariff Act), the Fair Competition Act, reduced restrictions on professions and foreign equity, and fewer NTBs (nontrade barriers),” he said.
The US’ trade in goods deficit with the Philippines doubled to $1.7 billion last year from $834 million in 2013, the report noted.
