Japan hits RP for auto tariffs
Business Mirror | Tuesday, 20 April 2010
Japan hits RP for auto tariffs
Written by Max V. de Leon / Reporter
THE Japanese Chamber of Commerce here is disappointed with the failure of the government to honor the country’s tariff-elimination commitments under the Japan-Philippines Economic Partnership Agreement (Jpepa), particularly on the automotive sector.
“We are continuously talking with the Philippine side for the timely implementation of the agreement. It seems there are some problems. The agreement has been signed and only the implementation is not taking place,” said Yasuhiko Arimitsu, president of the Japanese Chamber of Commerce and Industry in the Philippines.
The Philippines has opted to suspend its tariff-elimination commitments in the Jpepa following petitions from the automotive manufacturers and workers that the country keep its current tariff rates for vehicles coming from Japan up to 2013.
The Automotive Industry Workers Alliance (Aiwa) said the country could witness the unrestricted entry of vehicles from Japan duty-free starting this year if the government allows the tariff-elimination schedule to proceed as stated in the agreement.
The group said removing tariffs would put at risk the jobs of 75,000 industry workers; P100-billion investment in the auto industry that generates around P12 billion in annual government revenue from duties, excise taxes and value-added taxes; merchandise exports totaling $2 billion annually; and P350 million in withholding tax per year.
The Chamber of Automotive Manufacturers of the Philippines Inc. echoed Aiwa’s petition.
Trade Senior Undersecretary Thomas Aquino earlier told the BusinessMirror that the Philippines had opted to renegotiate the provisions on automotives.
He said any reduction in auto tariffs is premised on the commitment of Japan that it will pour in significant investments in the domestic industry, the scale of which is to be determined by the Philippines. “That is the condition: We will bring the tariffs down if there is significant investment. That is the determining factor.”
But Arimitsu said it is not right to use the level of Japanese investments that already came in as negotiating leverage. “I don’t think there is any specific agreement on investments from the Japanese side.”
But the government has probably run out of excuses because a ranking official of the Board of Investments told the BusinessMirror that based on indicators from 2009 and first quarter of 2010, the country indeed received sizable capital inflows from Japan.
“Japan has a big share in the investments that came in. I think the Jpepa gave confidence to the Japanese to invest in the country despite the global crisis,” the official said. The source said the negotiations between the Japanese and the Philippine side on the auto tariffs are still ongoing.
