Plastic manufacturers seek zero MFN duty

      Plastic products manufacturers have petitioned the Tariff Commission to abolish the 15 percent tariff on resins, the raw material for plastic products production, imported from outside of ASEAN to ensure enough supply and to completely remove the tariff distortion between finished and intermediate materials.

    
      This was stressed by the Philippine Plastics Industry Association (PPIA) in a position paper submitted to the Tariff Commission, which is scheduled to conduct a public hearing on the PPIA petition on February 8 to 9 along with two other tariff issues: The review of EO 262 modifying tariffs on motor vehicles and a comprehensive tariff review to set the tariff schedule for 2011-2015 on products falling under Chapters 1-97 of the Tariff and Customs Code of the Philippines.

 
      In a letter to Tariff Commission chairman Atty. Edgardo B. Abon, PPIA president Dr. Alfonso Siy said the removal of the 15 percent most favored nation (duty on imports from non-ASEAN) tariff would resolve the tariff distortion between ASEAN finished plastic goods now at zero and the MFN resins at 15 percent.

 
    “This would make our industry competitive,” Siy said.

  
      The domestic plastic products manufacturers used to suffer two distortions on their raw materials and imported finished plastic products from two fronts – ASEAN and MFN.

   The tariff distortion in ASEAN was already corrected when Malacañang issued Executive Order 850 on Dec. 23, 2009 in compliance with the country’s commitment to the ASEAN Trade in Goods Agreement eliminating all tariffs on products including petrochemicals imported from the region except on four highly sensitive items such as rice, corn, poultry and swine products.

  
     The PPIA said that while they can now source polymers or plastic resins from ASEAN at zero duty, there are time when supply in the region is not enough supply and they may be forced to import from the MFN countries particularly China.

The PPIA expressed fear that they may finally lose out the domestic plastic products market to cheaper producers in ASEAN following the zero tariff privilege if they cannot get zero MFN tariff for their raw materials.

 
    “The removal of the 15 percent MFN tariff rate on plastic resins would greatly help the local plastics industry in times when there is not enough supply of raw materials from other ASEAN countries and we will be compelled to import plastic resins from non- ASEAN countries like China at 15%,” the PPIA said.

     “If this happens, our local products would be at a great disadvantaged against the influx of imported ASEAN finished goods coming into our domestic market at zero percent tariff while we purchase our raw materials from MFN 15% tariff rate,” the PPIA said.