The Indonesian government said it will ask for compensation if the Philippines will extend the imposition of the definitive safeguard duty on imported cement and instead replace the safeguard duty with a more effective and targeted anti-dumping trade measure.
“Indonesia reserves its right to request rate compensation should the existing safeguard measure on imported cement is extended,” said Indonesia director of trade events of the Ministry of Industry Natan Kambuno during the virtual public hearing Wednesday by the Tariff Commission on the petition by local cement manufacturers for the extension of the safeguard duty against the importation of ordinary Portland cement Type 1 and blended Type 1B from various countries.
The three year definitive safeguard duty on imported cement is expiring in October this year, but local cement producers under the Cement Manufacturers Association of the Philippines (CeMAP) has asked the Tariff Commission for extension of the punitive duty.
Foremost, Kambuno cited data provided in Table 4.3 of the staff report issued by the Tariff Commission on May 23, 2022 that the Philippines only imported 532,000 metric tons of the concerned product from Indonesia from 2019 to 2021. This accounts for just 2.7 percent of the Philippine imports of cement during the period while Vietnam accounted for 80 percent of Philippine total cement imports and is now subject to provisional anti-dumping duty.
As a developing country whose export was less than 3 percent of the Philippines import of the subject product, Kambuno said that “Indonesia fulfills the requirements for the de minimis” import volume as stated in article 5.1 of the Agreement on Safeguards. Therefore, he said, Indonesian cement should be excluded from the extension of safeguard measure on cement. In addition, the government of Indonesia notes that an anti dumping investigation on cement from Vietnam was initiated on April 20, 2021.
“The government of Indonesia believes that the existing safeguard measures should not be extended further,” he said. Instead, he urged that the expiring safeguard measure be replaced with a more effective and targeted anti dumping trade measures as any extension of safeguard measure is no longer necessary nor appropriate.
In addition, Kambuno recognizes the monitoring of the developments on the Philippine cement industry issued by the Tariff Commission that in 2021 the Philippines cement industry has made significant positive adjustment to import competition and is moving towards increased competitiveness.
Local cement also remained strong in the domestic market even with the Covid pandemic. Part of the Tariff Commission monitoring report also noted that the domestic cement industry is improving its efficiency levels, and hence increasing its ability to compete successfully with imports when safeguard measure is no longer in place.
Moreover, the report said that the economic indicators of Philippine cement producers, including production, sellers, and inventory, were relatively stable during the past three years, despite the Covid- 19 outbreak in 2020.
For example, Kambuno said the staff report showed that production volume of local cement plants increased by 1.73 percent from 2020 to 2021. Sales volume also increased 2.27 percent from 2020 to 2021. Moreover, Philippines cement industry was able to increase its capacity from 32.5 million metric tons in 2019 to 36.5 million metric tons in 2021.
With that, he said the report noted of “no recurrence of injury is indeed experienced by the domestic industry.”
As such, he said, the current safeguard message should not be continued.
Lastly, the government of Indonesia also recalled that a safeguard measure is an extra ordinary remedy to be taken only in emergency situations under Article 8 of the Agreement on Safeguards,.
“The government of Indonesia reserves its right to request rate compensation should the existing safeguard measure on imported cement is extended,” he concluded.