By Roy Stephen C. Canivel
The impending shutdown of the Nissan car assembly plant highlights the need for a safeguard measure which made imported vehicles more expensive than locally produced ones, Department of Trade and Industry Secretary Ramon Lopez said on Thursday.
The DTI imposed the measure at the beginning of this year.
Nissan Philippines Inc. (NPI) wrote to the Department of Trade and Industry (DTI) on Wednesday, informing Lopez about its decision to shutter its assembly plant in the City of Santa Rosa.
Under the Safeguard Measures Act of 2000, such a trade remedy is imposed by the government when a surge in imports seriously injures or threatens to seriously hurt a local industry.
But unlike other moves, this is not supported by local big players. For the first time in history, safeguard duties were imposed because of a petition filed by unionized workers through the Philippine Metalworkers Alliance.
“The announcement of Nissan to close their assembly operations in the country is regrettable, as these developments all the more demonstrate the critical situation of the local motor vehicle industry,” Lopez said.
“The stoppage of Almera’s assembly operations, following closely that of Honda and Isuzu, only highlights that the local auto assembly industry is critically impacted by the surge in imports and will thus benefit from the timebound safeguard duty,” he said.
Under the measure, every imported passenger car becomes P70,000 more expensive, while each imported light commercial vehicles will cost P110,000 more. These amounts were based on the DTI’s analysis of the industry’s performance from 2014 to 2018.
The temporary duties would be imposed for 200 days, or over the next six months. It could last longer—from four to 10 years— if the Tariff Commission validates the DTI’s findings after a 120-day investigation.
Even with the safeguard measure, the Philippines is still one of the most open automotive markets in the region, according to the DTI. Thailand imposes an 80-percent tariff on vehicles from outside of Asean.
Indonesia, which imposed nontariff measures, effectively discouraged imports. This, the DTI said, was why imports only accounted for 7 percent of the auto market in Indonesia.
In contrast, locally assembled light commercial vehicles only accounted for 7 percent of the Philippine market.