DTI amends list of countries exempt from safeguard tariffs

By now, consumers will have been made aware of the provisional safeguard tariffs imposed by the Department of Trade and Industry (DTI) on imported vehicles, with several local car brands announcing the corresponding change in prices.     

The PH-spec Mazda CX-5 is sourced from Malaysia, among those exempted from the tariffs

The DTI’s Department Administrative Order (DAO) 20-11 covers vehicle models coming from our biggest sources of import models: Thailand, Japan, China, Korea, and Indonesia (for passenger vehicles). There are a number of territories exempted from this rule, such as India, Taiwan, and Malaysia.

An updated list of countries not covered by the tariffs is now contained in the DTI’s DAO 21-01, published last February 23. The agency follows an agreement with the World Trade Organization (WTO) to exclude developing countries that have minimal or insignificant import volume.   

The DTI updated its list of exempted countries

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For Europe, nations such as Hungary, Latvia, Lithuania, and Poland have been removed from the list. In the Americas, Chile has been dropped. For the Middle East, Israel will no longer be enjoying exemptions.

All these countries belong to the 37-strong Organization for Economic Cooperation and Development (OECD), which are classified as high-income economies. Interestingly, Colombia, another OECD member, remains on the list of exempted nations.

No official definition of “developed” and “developing” countries exists among the WTO’s roster. It adds that while each participant can choose to adopt either designation to avail of trade provisions, this can be challenged by other member-states.

Some nations have been removed from the original list

The decision to impose the safeguard tariffs is allowed under Republic Act 8800 or the Safeguard Measures Act and comes after the DTI reported a link between the influx of imported vehicles and declining local employment.

Several carmakers have shuttered their assembly plants in the Philippines, the latest of which were Honda and Isuzu in 2020.

As the tariffs are provisional in nature, they will be in effect for 200 days while the Tariff Commission conducts a formal investigation.

Keep up with the most recent auto industry updates at Philkotse.com.