US business groups urge PH to lift trade barriers

December 1, 2014 at 09:52

Concerns raised include ownership limits, high tariffs

Philippine Daily Inquirer

8:46 AM | Monday, November 10th, 2014

MANILA, Philippines–Thirteen of the biggest industry associations in the United States have urged the Philippine government to relax foreign ownership restrictions, lift the high tariffs and taxes, and further strengthen intellectual property rights protection because these trade barriers continue to hamper the entry of more trade and investments into the country.

In separate comments submitted to the office of the US Trade Representative (USTR), the groups cited the need to ease market access that would enable US firms to further increase exports to the Philippines.

The groups were the National Association of Manufacturers, National Potato Council, American Insurance Association, Motion Picture Association of America, Pharmaceutical Research and Manufacturers of America, Distilled Spirits Council of the United States Inc., International Intellectual Property Alliance, American Potato Trade Alliance, Toy Industry Association Inc., US Grains Council, Western Growers, Herbalife and Wine Institute.

Their comments were compiled by the USTR for the 2015 National Trade Estimate Report on Foreign Trade Barriers.

The National Association of Manufacturers, for one, sought restrictions to investments for the Philippines.

The US Grains Council, meanwhile, urged the need to abolish the National Food Authority (NFA) and let private traders do most of the importation to cover local grain production shortfalls.

“The country’s agribusiness sector is dominated by oligopolies whose private interests are intertwined with special interest groups and close ties with the government,” the USGrains Council said.

Both the National Potato Council and the American Potato Trade Alliance sought to reduce or eliminate the 10-percent tariff on imported frozen fries and 40-percent duty on fresh potatoes. Lifting these tariffs may increase demand by approximately $20 million.

Western Growers urged the lifting of tariffs in the Philippines, which it said remained “unreasonably high, limiting market access for many US fresh vegetables, fruit and tree nuts.” Also, the American Insurance Association wanted to lift the 10-percent mandatory reinsurance cession to state-owned Philippine National Reinsurance Company.

According to the Motion Picture Association of America (MPAA), retail and street piracy has beleaguered the home entertainment market in the Philippines. It urged the lifting of foreign investment in mass media and the removal of undue restrictions on the duration and placement of advertisements.

MPAA further noted that taxes imposed on film companies were inordinately high, as UScompanies are burdened with a 30-percent income tax on net profits, a 5-percent withholding tax on gross receipts chargeable to income tax liability, a 10-percent tax on the distributor’s share of the box office and a municipal license tax of 0.75 percent.

For the Pharmaceutical Research and Manufacturers of America, US-based pharmaceutical firms continued to face significant market access and intellectual property concerns in the Philippines, relating to legislative proposals that would impose further ad hoc price controls and the unclear mechanism for cost-sharing for discounted medicines for seniors and individuals with disabilities.

Unethical business practices and counterfeit medicines also hamper increased trading in this industry.

The Distilled Spirits Council has sought for the elimination of Philippine tariffs on imported distilled spirits and exemption of such products from the allergen and ingredient labeling requirements, as consistent with standard international practices.

US spirits exports to the Philippines in 2013 fell by 50 percent to only $470,000 from the $947,000 reported in 2012.

Herbalife, a global nutrition company, meanwhile, cited the lengthy registration of products given the limited resources of the Philippine Food and Drug Administration.


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