Jakarta is urging Manila to reconsider its special safeguard duty (SSG) on coffee imports as Indonesia is set to raise before a World Trade Organization (WTO) committee transparency concerns over the Philippines’s imposition of the trade measure.
Indonesia has tabled a document for discussion for the upcoming WTO Committee on Agriculture (COA) meeting concerning the Philippines’s imposition of SSG on imported instant coffee and other coffee extracts.
In a communication dated June 14, Indonesia disclosed that they did their own analysis to verify the accuracy of the trigger price notified by the Philippines to the WTO on the concerned imported coffee products.
Using “publicly available” Philippine data, Indonesia said it found out that the Philippines’s notified trigger price “has far exceeded the correct average price of imports of instant coffee and extract coffee” as determined by pertinent WTO legal texts.
Under the WTO Agreement on Agriculture (AOA), the trigger price SSG shall be determined by the average imported price of the commodity from 1986 to 1988.
Indonesia submitted the document to the WTO-COA “for the purpose of a discussion.”
“Based on Article 18.7 of the WTO Agreement on Agriculture, Indonesia presents this information to other members in the interest of promoting transparency surrounding the Philippines’s trigger price on instant coffee and extracts of coffee,” the communication, a copy of which was obtained by the BusinessMirror, read.
In its analysis, Indonesia said the Philippines was unable to take into consideration the imported coffee products in the year 1988 in computing its trigger price.
Indonesia argued that publicly available Philippine import data showed that it imported instant coffee and coffee extracts in 1988 and not only in 1986 as claimed by the Philippines.
Due to this, Indonesia explained that the Philippines’s trigger price for the concerned coffee products should averaged at P154.85 per kilogram and not P203.74 per kilogram, which is Manila’s notified trigger price.
Data provided by Indonesia showed that the imported price of instant coffee and coffee extracts in 1986 was at P203.51 per kilogram, while in 1988 it was estimated at P106.10 per kilogram.
Indonesia disclosed that its exports of instant coffee and coffee extracts to the Philippines in 2018 has been “adversely affected” in due to the latter’s imposition of the SSG.
Indonesia said “it urgently raises its findings and comments” on the Philippines’s trigger price before the WTO-COA since it has “substantial interest in the application of SSG by the Philippines.”
“In light of this important findings, the present Philippines’s trigger price has far exceeded the correct trigger price and, in order to be consistent with the AOA, correction to the existing trigger price of instant coffee and extracts of coffee as per WTO notifications by the Philippines is required,” Indonesia said.
“As one of main exporters of this product category, Indonesia expects that the Philippines will seriously consider our findings on this important matter,” it added.
Nonetheless, Jakarta said “it looks forward to having a productive discussion on the correct determination of the Philippines’s trigger price of instant coffee and extracts of coffee to ensure its consistency with the AOA.”
The Philippines has explained in previous WTO-COA meetings that it did not import any instant coffee and coffee extracts from 1987 to 1988, hence, resulting in only one reference period for its trigger price which is 1986.
“There was neither any commercial importation in 1987 nor in 1998 of the concerned products; hence, the mathematical calculation for arriving at the trigger price of P203.74 for these products only covered the import and price data in 1986,” the Philippines explained in the September 25th WTO-COA meeting last year.
Furthermore, the Philippines argued that it subjected the trigger price of instant coffee and coffee extracts “to the required public notices and public hearings/consultations” under relevant domestic laws “prior to its WTO notification and implementation of the SSG.”
The country’s instant coffee (HS Code 21011110) imports in 2018 fell by nearly 70 percent to 28,402.231 metric tons, from 93,696.938 MT in 2017, Philippine Statistics Authority (PSA) data showed.
PSA data showed that Indonesia accounted for 60.64 percent of the total imported instant coffee last year. But Jakarta’s instant coffee shipments to the Philippines in 2018 declined by 68.47 percent to 17,225.675 MT, from 54,642.533 MT in 2017.
PSA data also showed that the country’s importation of preparations with a basis of extracts, essences, or concentrates or with a basis of coffee (HS Code 21011200) in 2018 doubled to 213,729.286 MT, from 106,017.816 MT in 2017.
Indonesia was the top supplier of the coffee extract as it accounted for 80.93 percent of the total imports. Jakarta exported 172,978.890 MT of coffee extracts in 2018 versus the 100,474.32 MT recorded in 2017.