THE Philippines stood its ground on the imposition of a special safeguard duty (SSG) on instant-coffee imports, saying it did not omit any import figures in calculating its trigger price as claimed by Indonesia.
During the World Trade Organization Committee on Agriculture (WTO-COA) meeting recently, the Philippines maintained that it did not import any instant coffee and other coffee extract products in 1987 or in 1988; thus, it used only 1986 import figures in calculating its trigger price.
This was the Philippines’s response to Indonesia’s query on why Manila supposedly omitted “the import and price data in1988” in its calculation of the trigger price for SSG on instant coffee and other coffee extract imports.
Under the WTO Agreement on Agriculture, countries should determine their trigger price by averaging the import price figures from 1986 to 1988.
“How could there be data for 1988 or even for 1987 when there was no importation in either 1988 or 1987?” read the country’s statement during the June 25 to 26 meeting. A copy of the statement was obtained by the BusinessMirror.
“Since there were no importations of subject coffee products in 1987-1988, the trigger price that the Philippines notified to the WTO is only based on the importation in 1986,” the Philippines added.
Different products
In a communication submitted by the Indonesia to WTO, Jakarta disclosed that they 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.
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 Manila.
Due to this, Indonesia explained that the Philippines’s trigger price for the concerned coffee products should average P154.85 per kilogram and not P203.74 per kilogram, which is Manila’s notified trigger price.
Indonesia disclosed that its exports of instant coffee and coffee extracts to the Philippines in 2018 were “adversely affected” by the latter’s imposition of SSG.
The Philippines pointed out that the import figures in 1987 and 1988 that Indonesia is using pertain to coffee products of different tariff nomenclature. This, the Philippines noted, are “definitely not the ones that are subject of the price SSG” imposed by Manila.
“Unfortunately, the same provision [AOA Article 5.1b] does not provide for any creative interpretations of the calculation—as Indonesia has been suggesting—for arriving at a different trigger price in absence of any importation in 1987 and 1988,” the statement added.
The Philippines maintained that the only correct trigger prices for the imported coffee products being questioned by Indonesia are the figures Manila notified to the WTO almost 20 years ago.
Open for bilateral
After the Philippines’s statement, Indonesia responded that its “focus” is on roasted chicory, a new ingredient widely used in instant coffee, a source familiar with the matter said.
Indonesia explained that chicory sometimes comprised up to 30 percent to 50 percent of instant coffee formulation, the source added.
“Indonesia asked the Philippines to include the import price of this new ingredient for year 1986 to 1988 and correct its trigger price notification to the WTO,” said the source, who is not authorized to speak on behalf of the two countries.
The Philippines welcomed Indonesia’s explanation and asked Jakarta to continue bilateral talks to iron out its concerns over Manila’s trade measures.
“The Philippines said it was educated by this new information and will restudy the situation. It invited Indonesia for bilateral talks, to which Indonesia agreed,” the source added.