DTI Secretary Lopez says Nissan shutdown highlights need for safeguard measure

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.