Japanese firms buck safeguard duties on steel, iron products

The head of the Japanese Chamber of Commerce and Industry of the Philippines Inc. (JCCIPI) has warned the government against imposing safeguard duties on imported steel and iron products as this may adversely affect trade and public interest.

“We, the Japanese Chamber, would like to object to the imposition of safeguard measures which may cause profound impact on not only our member companies but also the Philippine economy,” said JCCIPI president Takashi Ishigami.

“The safeguard measures, once imposed, will have a far-reaching and sweeping negative effect on international trade and public interest in the Philippines. So we are requesting the Department of Trade and Industry to consider carefully whether or not the application of the safeguard measures would [serve] public interest before they are implemented,” he stressed.

Ishigami was reacting to the petition of Puyat Steel Corp., which earlier sought for safeguard measures against imported galvanized iron and pre-painted sheets and coils.

Puyat Steel had claimed that these imports were causing “serious injury” to the domestic industry.

Citing latest data, Ishigami noted that around 60 percent of the Japanese companies in the country were engaged in manufacturing, and are contributing to the Philippine economy by exporting their products to foreign countries, supplying their products to domestic market, and generating jobs for Filipinos.

JCCIPI member companies, in particular, are importing and using Japanese galvanized steel for the manufacture of automobile, home appliances and for the re-export products, which, according to Ishigami, “do not affect Philippine steel industry.”

Some of the Japanese galvanized steel being imported are also patented products, which meant that these are not supplied by Philippine steel manufacturers.

“Therefore, at least, [the] above-mentioned galvanized steel used for re-export, automobile, home appliance and patented products should be exempted from the safeguard measures,” Ishigami added.

“While JCCIPI believes that [it has] a good relationship with various Philippine industries and [have been contributing] to the Philippine economy, we are worried that the safeguard measures have extensive negative impact on business activities of our member companies. Again, we strongly wish DTI’s careful judgment on this matter,” he said.

Based on a notice to the World Trade Organization, the Philippine government initiated on Sept. 27 a safeguard investigation regarding Puyat Steel’s claims against imported iron and steel products.

“The investigation was initiated following an evaluation of the petition filed by the domestic industry, represented by Puyat Steel Corp.,” the WTO said in its notice. “The documents submitted by the petitioner showed that increased imports have caused serious injury to the domestic industry as indicated in their declining market share, production, sales, capacity utilization, productivity, profitability, price suppression and undercutting.”

Products that were subject to the investigation were galvanized iron (GI) sheets and coils classified under AHTN (Asean Harmonized Tariff Nomenclature) Codes 7210.4110, 7210.4190, 7210.4990, 7210.6910, 7210.6990, 7212.3019, 7212.3093 and 7212.3099.

Also included were pre-painted Galvanized Iron (PPGI) sheets and coils classified under 7210.7011, 7210.7012, 7210.7030, 7210.7060, 7210.7090, 7210.9840, 7210.9050, 7210.9060, 7210.9090, 7212.4011, 7212.4019, 7212.5012, 7212.5013, 7212.5019 and 7212.5029.

According to the WTO, a safeguard investigation seeks to determine whether increased imports of a product are causing, or are threatening to cause, serious injury to a domestic industry.

During a safeguard investigation, importers, exporters and other interested parties may present evidence and views and respond to the presentations of other parties.

A WTO member may take a safeguard action (i.e. restrict imports of a product temporarily) only if the increased imports of the product are found to be causing, or threatening to cause, serious injury.