Tuesday, August 23, 2005
Espinoza: Competing on very uneven playing field
By Fred C. Espinoza
JOBS. A recent Supreme Court (SC) decision stopping the government from implementing the Safeguard Measures Act (SMA) to the domestic industry has prompted Sen. Manuel Roxas II, chairman of the Senate economic affairs and trade committees, to issue an urgent appeal to the Filipino citizens’ love of country “to support dollar-earning local industries that provide jobs and income to millions of their countrymen.”
In a related development, last Aug.15, a position was formulated by the leaders of an agro-fishery coalition of 39 federations and organizations known as the Alyansa Agrikultura. The group asked that the government immediately request a reconsideration of the recent SC decision on the Southern Cross Cement Corp. and Filipino Metals Corp.
Instead of blaming the high court, our policy-makers would do well to get their act together in projecting a strong leadership for the Philippines in the World Trade Organization (WTO).
One of the major concerns of the Alyansa Agrikutura is that “today, the agriculture and agriculture-related sectors employ 67 percent of our workforce,” while these sectors have to compete against importers on a very uneven playing field.
The group is well aware of the existence of three laws that serve as safety nets against unfair trade: The Anti-Dumping Law, the Countervailing Duties Law and the SMA. But what may have shocked the leaders of the Alyansa Agrikultura most could be the realization that “of these, only the SMA is practical enough,” the group quoted lawyer Maria Lourdes Sereno, a former counselor of the WTO Appellate Body, as saying. “It is no wonder that so far, no one has availed himself of the two other laws.”
Moreover, the group feels that with the recent SC decisions, even the SMA is in jeopardy. The July 15 decision on Filipino Metals Corp. imposes an injunction on the SMA implementation.
Local industries and agriculture producers that have been granted safeguards can no longer rely on them. This is because the Bureau of Customs is restrained from collecting the safeguard tariffs. While this injunction is effective, no new safeguard application can be processed, the group says.
The message that the Alyansa Agrikultura wanted to send to the policy-makers of this administration is that unless the SC reverses its ruling, the “SMA is dead.” The group said it has no remedy against import surges.
One thing is clear, though. In the case of Southern Cross Cement Corp., the SC ruled that the trade or the agriculture secretary, despite being the alter ego of the president of the country, cannot go against the recommendations of the Tariff Commission (TC).
However, five of the SC justices, including Chief Justice Hilario Davide Jr., disagreed. The dissent, penned by Justice Artemio Panganiban, opined that the president and his alter egos, “could not be bound by the findings of a lower, recommendatory body like the Tariff Commission.”
In the meantime, importers will demand the return of “all the safeguard duty collections on agricultural and industrial imports. It will be ironic that the very importers who have caused damage to our agriculture and industry will be refunded the P1.7 billion in safeguard duties that should have instead been spent in building the economy,” the group said.
Alyansa Agrikultura strongly feels that the high court ruling is dangerous for agriculture “because it does not vest the final decision on the Department of Agriculture (DA), which knows the complexities of agriculture, but on the TC.”
The order of the day would certainly be for the new alter egos of the president of the country to assert their leadership by petitioning the high court to reconsider its decision based on what they know best under the circumstances, being leaders in their chosen fields of endeavor.
It would do well for Trade and Industry Secretary Peter Favila and DA Secretary Domingo Panganiban to prove to the troubled sectors of the economy that the administration is ready with the needed solution to the issue at hand.
The chief executive has given them the autonomy to manage their departments, taking a cue from what Senator Roxas learned about certain lapses in the TC’s exercise of its functions.
He mentioned to the Alyansa Agrikultura leaders that “serious mistakes and misinterpretations may be made that may jeopardize countless farmers and fisherfolk.”
According to Roxas, a former trade secretary, “this happened on the Southern Cross case.” A document submitted by the Department of Trade and Industry, which studied this case for 10 months (as compared to the TC’s five-month study), said the TC used a “flawed framework, inconsistent inferences and erroneous methodology.”
(August 23, 2005 issue)
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