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Thursday, July 02, 2009


The multisectoral Fair Trade Alliance (FairTrade) urges the government to recalibrate tariffs upward for all industrial and agricultural goods based on the Philippines' maximum World Trade Organization (WTO) bindings, except for raw materials used by local industry.

FairTrade Lead Convenor Wigberto Tañada pointed out that under the WTO rules, the Philippines has every right to increase tariffs up to their maximum binding rates.  Philippine actual or MFN tariffs for industry average to around 6 per cent and yet the country's WTO tariff binding rates are twice, if not more.

"The point is that there are flexibilities available in our trade agreements which can be used to arrest the country's financial distress and counter falling receipts from exports," Tañada said.  
"While we may reduce tariffs on products not locally produced or without any local substitutes down to one or even zero per cent, products manufactured locally that compete with imports should have their tariffs increased, not only as a source for the much needed revenues for the government but also as protection for domestic industry and agriculture."

"The upward recalibration of tariffs will help preserve local jobs in these crisis periods and will also help raise the utilization of domestic production capacities," Tañada added.

"We want an upward re-calibration because the tariff liberalization program undertaken in the l980s and l990s was carried out in a unilateral and accelerated manner without any consultation or coordination with industry and local agricultural producers." 

"We lowered our tariffs unilaterally without even negotiating with our trade partners and we lowered them much lower than the maximum WTO binding rates which were already unacceptable to many countries in Asia," Tañada explained. 

According to FairTrade, the present financial crisis is a test whether the present national leadership has the political will to pursue bold trade reforms and to adjust tariffs based on the flexibilities we have under the WTO. This administration cannot escape the responsibility and obligation to its citizenry to muster a strong will in enforcing tax and customs laws.


The Fair Trade Alliance (FairTrade) is a broad coalition of formal and informal labor, industry, agricultural, non-governmental organizations, and youth pushing for trade and economic reforms.

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