By Justine Irish D. Tabile, Senior Reporter
THE PHILIPPINES needs a mechanism for establishing that manufacturing inputs used in its exports are not sourced from countries suspected of employing forced labor, the Philippine Chamber of Commerce and Industry (PCCI) said, citing the need to dodge the 12.5% US tariff.
“We are working on that now. Hopefully, we can prove that the input materials are not coming from any countries with forced labor,” PCCI President Ferdinand A. Ferrer told reporters on Monday.
“What we need to do first is validate the evidence these next two or three weeks,” he added. “Not only validate with evidence, but you have to really look at the pattern.”
Mr. Ferrer said businesses are also hopeful that the 12.5% rate will be the highest tariff imposed by the US on the Philippines, as the country is not subject to other reviews.
“The good is hopefully this is the highest (rate) we will get while other neighboring countries are also being investigated for other things … which could bring their rates beyond our rate,” he said.
“But we do not want that type of advantage, we should compete on our strengths, our workmanship and our cost … We do not want that leverage but it is here,” he added.
Although most of the country’s major export products, such as electronics and agricultural goods, are exempt from the levy, Mr. Ferrer said the tariff remains a concern for businesses.
“Any tariffs imposed on the Philippines are always worrisome … Any industry that would be given that 12.5% will make that particular industry or our country slightly at a disadvantage,” he said.
One of the solutions, he said, is to diversify where the manufacturers source their materials.
“We are looking at alternative input material … that is definitely (not made with) forced labor,” he said.
He said he expects the joint administrative order (JAO) signed by the departments of Trade and Industry, Labor and Employment, and Finance to help the country address the issue.
The JAO established rules for investigating and prohibiting the import of goods produced wholly or partly through forced labor.
It also created an inter-agency committee that will receive, evaluate and investigate complaints and information involving imported goods suspected of having been produced with forced labor, and recommend appropriate action.
Last week, the US imposed a 12.5% levy on Philippine goods after an investigation by the Office of the US Trade Representative found that the country had failed to restrict imports of goods produced using forced labor.
The levy, however, exempted selected electronic products, automotive and aircraft parts, agricultural products and minerals.
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