During the public hearings held at the Tariff Commission, the local cement industry made a solid case for the need for anti-dumping duty to protect cement makers as they build up capacity for the economic resurgence.
An ongoing P1.4 billion project among local manufacturers to develop the industry will take care of the projected rise in demand for the coming years.
Amazingly, despite the huge outlay from domestic producers, the TC concluded that the domestic cement manufacturers failed to make a positive adjustment to import competition.
Thus, the TC recommended to the Department of Trade and Industry the end of the punitive tariff on cement mainly from Vietnam.
The TC recommendation escapes logic as it said that “instead of seeking to destroy competition through unfairly applying for these protectionist measures, the domestic cement manufacturers should adapt to the changing global market conditions and innovate their technology used for manufacturing the subject products, which will ultimately benefit them and their end consumers.”
The TC was talking as if a level field exists in the market flooded by cheap cement that traders are using as a tool to kill the local industry.
The ruling may just discourage the local industry to pursue the expensive projects they are undertaking to make the local industry grow.
At the moment, the safeguard measure is being relied on by cement makers to complete their adjustment plans for global competition.
Trading would be far easier for investors since it does not need physical capital such as factories that involve seriously huge money.
Most of all, jobs will be lost if most of the manufacturers shift to trading as a result of the unfair competition from imports.
Without local industries, however, the country will be forever dependent on imports, the cost volatility of which is palpable in the ongoing global turmoil on prices.
Import dependence while killing local industries also drains foreign currencies which the country direly needs during the recovery phase.
The Cement Manufacturers Association of the Philippines said “the threat of injury to the local cement manufacturing industry remains imminent from neighboring exporting countries, who continue to this day to flood the domestic market with imported cement products even with the Safeguard Measure enforced.”
Ending the safeguard measure would be “premature” and will “jeopardize the painstaking work of the local cement industry to stay operational during the very difficult months of the still ongoing pandemic.”
The TC in its recommendation said there was “no significant overall impairment” in the position of the local cement industry that resulted in serious injury.
Removing the equalizer against the dumped imports at this time would spell uncertainty to the local industry and put at risk their Adjustment Plan projects.
The TC recommendation favors only those who care little about developing the local industry for the benefit of the economy.