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Jpepa tariff lifting worries auto workers

Business Mirror | Thursday, 19 November 2009

Jpepa tariff lifting worries auto workers

Written by Max V. de Leon / Reporter

THE “horrors” of the Japan-Philippines Economic Partnership Agreement (Jpepa) continue to haunt the country.

About 75,000 auto-industry workers are starting to worry for their jobs as the government has yet to renegotiate the tariff-elimination provision for Japanese vehicles with below 3-liter engine displacement and auto parts starting on January 1 under Jpepa.

Angel Dimalanta, president of the Automotive Industry Workers’ Alliance (Aiwa), said with barely less than two months to go, the team of Trade Undersecretary Elmer Hernandez, who is also the Board of Investments (BOI) managing head, has yet to act on the group’s petition for the Philippines to move for the suspension of the tariff-elimination schedule for vehicles under Jpepa.

“Even Campi [Chamber of Automotive Manufacturers of the Philippines Inc.] has not heard of any renegotiation happening, and we can only do that up to December,” Dimalanta told the BusinessMirror.

Besides the removal of tariffs on brand-new completely built units (CBUs), Dimalanta said the group is also wary of the implementation of Article 27 of the Jpepa, which allows secondhand vehicles from Japan to enter the country.

Dimalanta said the only assurance being given to them by Hernandez is the ban on imported used vehicles under Executive Order (EO) 156, or the Motor Vehicle Development Program.

However, Dimalanta said EO 156 is now undergoing revisions and nobody knows yet what will be the new policy of the government on second-hand vehicle importation.

He said Article 4 of the Jpepa actually obligates the Philippines and Japan to align their respective policies to the bilateral agreement.

“Aiwa is extremely apprehensive that the Philippine automotive industry will be in great peril in case such negotiation does not immediately materialize. The auto industry and its workers already expressed its position early this year to extend all the current tariff rates until the maximum period allowed by Jpepa, or until 2013,” Dimalanta said.

The country, he added, could witness the unrestricted entry from Japan at zero tariff of completely built-up motor vehicles and parts and components beginning next year.

Besides the jobs of 75,000 workers, Dimalanta said also at stake is the P100-billion investment in the auto industry that generates around P12 billion in annual government revenue from duty, excise tax and value-added tax. The industry also has merchandise exports totaling $2 billion annually.

Also, the workers alone remit to the government P350 million in annual withholding tax.

 source: Business Mirror