ASEAN tariffs

As reported in BusinessWorld:

"The Philippines will make good on its promise to lower Southeast Asian import duties next year, but is mulling using non-tariff measures to shield local industries, a Trade department official said on Friday.

The proposed tactic will be raised in July with other Association of Southeast Asian Nation (ASEAN) members, Trade Secretary Peter B. Favila said.

This comes as tariffs on the remaining 20% of the country’s goods such as corn, cassava, poultry and swine are slated to fall to 0-5% next year under the Association of Southeast Asian Nations Free Trade Area (AFTA) Common Effective Preferential Tariff (CEPT) arrangement."

The local industry leaders, predictably, consider such moves as unsatisfactory. For my part, I commented that "the impact of non-tariff measures are unlikely to completely offset tariff cuts. These are legal measures that are part of the trading system which have been anticipated and contemplated. Their effect have been factored in already. Protectionism is obviously not advisable, but not every measure to safeguard interests is protectionist."

In relation to this, you may want to read A Protectionism Fling: Why Tariff Hikes and Other Trade Barriers Will Be Short-Lived by Daniel J. Ikenson (associate director for the Center for Trade Policy Studies at the Cato Institute). For copy of the article, click here.