Industries push back on including Thai auto parts in trade retaliation

INDUSTRY GROUPS said they are opposed to the inclusion of motor vehicle parts on a list of Thai products being considered for a suspension of tariff concessions.

The Trade department is seeking to suspend tariff concessions in retaliation against Thailand over a 13-year-old trade dispute involving Philippine tobacco products. 

The Tariff Commission in January presented the proposed 112 product lines for potential suspended concessions, which include cars, materials for plastic goods, air conditioners, and flavor enhancers. Industry representatives have called attention to the potential disruptions to regional supply chains that might ensue, as well as the threat of higher prices for goods.

The Philippine Parts Maker Association, Inc. (PPMA) has since proposed 34 more motor vehicle parts tariff lines, including vehicle air conditioning, fuel cut-off valves, wiring harnesses, battery cables, seat belts, floor mats, and silencers.

“We find this the right time also to be included in the suspension of concessions… it would definitely help promote and support the local production of these components,” PPMA President Ferdinand I. Raquelsantos said during the commission’s public hearing Tuesday.

The Philippines first complained in 2008 of Thailand’s customs valuation of Philippine cigarette exports, and the World Trade Organization (WTO) has ruled in favor of the Philippines. In response to Thailand’s non-compliance with the WTO ruling, the Philippines last year wrote a request to the WTO’s dispute settlement body to retaliate against Thai automotive exports to the Philippines.

The two countries have since agreed to a mediated process to resolve the ongoing trade dispute.

Arnupab Tadpitakkul of the Thai Automotive Industry Association called trade retaliation an alarming development in the state of the trade relationship between the two countries.

 “The high cost of imported parts would naturally lead to higher costs of finished products produced in the Philippines. As a result, both sides of the fence would be adversely affected by such trade measures,” he said. “We believe that that there remain other viable and less disruptive options for both parties.”

Rommel R. Gutierrez, president of the Chamber of Automotive Manufacturers of the Philippines, Inc., said the industry association is opposed to the suspension of concessions, which he said would raise retail prices and reduce supply.

“It is quite difficult to understand why automotive has been targeted for cross-retaliation. Automotive trade with Thailand is very critical to the Philippine automotive industry,” he said.

In response, Trade Assistant Secretary Allan B. Gepty said the Philippines has made use of all avenues to arrive at a resolution, adding that it is up to Thailand to avert what he called “the suspension of concessions that are rightfully available to the Philippines.” — Jenina P. Ibañez