The Philippines remains optimistic about the possible removal of the 12.5-percent tariff imposed by the United States (US) on its imports as the Trump administration reviews the country’s efforts to crack down on forced labor imports.

Department of Trade and Industry (DTI) Undersecretary Ceferino Rodolfo said the government is in close coordination with the Office of the US Trade Representative (USTR) on its ongoing review of the tariffs imposed on Philippine imports.

He said the review was prompted by the submission of a joint administrative order (JAO) that outlines an explicit ban on the entry of imported goods suspected or determined to have been produced, wholly or in part, through forced labor.

“We are in close coordination with the USTR in terms of their evaluation of the JAO, with the view of having us removed from the tariffs under Section 301,” he told reporters on the sidelines of a forum hosted by the Swiss Chamber of Commerce of the Philippines (SwissCham) last Tuesday, Aug. 4.

The USTR imposed a 12.5-percent tariff on the Philippines, alongside 40 other economies, after determining that the country had failed to impose and effectively enforce a prohibition on imports made with forced labor.

Under Section 301 of the US Trade Act of 1974, the USTR is authorized to take action, including imposing tariffs, to eliminate “unfair” foreign practices affecting US commerce, including the importation of goods made with forced labor.

While the Philippines has consistently asserted that its trade policies have not been proven to facilitate the entry of imports made with forced labor, the government has nonetheless stepped up its efforts to address the US’ concerns.

The JAO, in particular, established an interagency committee tasked with investigating cases involving imports produced through forced labor, which is chaired by the DTI.

Through this system, the Bureau of Customs (BOC) will act on the committee’s findings and recommendations to implement measures banning the importation of identified forced labor goods.

Earlier, Rodolfo said certain development partners had already expressed their intent to provide funding to support the Philippines in implementing the JAO.

Rodolfo said it is still difficult to determine whether the JAO would be sufficient to reduce or remove altogether the 12.5-percent tariff imposed by the US. Still, he noted that the USTR’s response on the matter has been positive so far.

Based on the DTI’s preliminary assessment, it is estimated that around 34 percent of the country’s exports to the US are covered by the USTR’s 12.5-percent duty.

Exports covered by the tariffs include goods produced by labor-intensive industries, such as leather and travel goods, apparel, footwear, and toys. Last year, exports of these products reached $6.25 billion, DTI data showed.

Philippine imports exempt from the tariffs include certain electronic products, agricultural goods, minerals, aircraft parts, and auto parts. Combined, these products reached a total value of $11.98 billion last year.

Meanwhile, Rodolfo said the government is still awaiting the findings of the USTR’s probe into structural excess capacity and production in manufacturing sectors, which may result in another set of tariffs.

The Philippines is not included in this investigation, but some of its competitors in trade with the US, such as Indonesia, Malaysia, Vietnam, and Thailand, are covered.

This means the Philippines could soon gain a competitive advantage in shipping products to the US, the country’s largest export market.