By Alyssa Divina & Dale Calanog / Special to the BusinessMirror
THE Department of Trade and Industry (DTI) led the call to repeal “burdensome” nontariff measures (NTMs) identified in a study conducted by the International Trade Centre (ITC) in a roundtable held at the Peninsula Hotel on June 29.
The study, in collaboration with the Export Marketing Bureau (EMB), aims to assess the Filipino business community’s perspectives on NTMs and identify what causes these to become regulatory and procedural trade obstacles.
NTMs are policy measures other than ordinary custom tariffs that have the potential to affect the international trade in goods.
ITC noted NTMs, such as sanitary and phytosanitary (SPS) and technical barriers to trade (TBT) regulations, should help increase the demand for import, as these policies exist to ensure the products entering a country are complying with international standards.
NTMs, such as licenses and permits to import and quality requirements, can also lead to higher costs and, eventually, hinder trading transactions, especially for exporters.
The study gathered more than 21,000 trade obstacles from more than 5,000 companies comprised mainly of small and medium enterprises (SMEs). ITC categorized these trade obstacles into three product requirements and conformity, customs clearance and control, and rules of origin and other trade rules.
Bureau of Philippine Standards (BPS) Director Anne Claire Cabochan said NTMs, such as product requirements and conformity, become a hurdle because of the lack of infrastructure, such as laboratories, that can assess whether a product complies with a given regulation.
However, despite the apparent inadequacy in testing and certification facilities, she reiterated the need to have these regulations, but added they should be better implemented.
“We would like our procedure not to create barriers to trade, but we would also like to ensure that these products, when they come to the Philippines, are indeed safe for consumption,” she said.
Other issues tied to product requirements and conformity include the private sector’s lack of capacity to comply with specific technical regulations, such as labeling and expensive fumigation requirements and high cost of local procedures that include informal payments in some cases.
Victor Trinidad, a lawyer from the Bureau of Customs (BOC), vowed to push for the enforcement of the Authorized Economic Operator (AEO) program, which is expected to reduce processing periods, as well as “accelerate growth,” Trinidad said.
Among the challenges in customs clearance and control are the lack of coordination between control points, lack of information dissemination on frequently changing procedures, as well as high fees and delays.
Along with the AEO, Trinidad is pushing for advanced ruling and valuation, both required by the World Trade Organization (WTO).
Trinidad said that, with these global standard procedures, companies can resolve “conflicts with the valuation and rules of origin way before their importation arrives.” Similar to the issues of the BOC, the issues surrounding trades rules—rules of origin, in particular—have something to do with lack of coordination between offices and also transparency in trade regulations.
Denise Cheska Enriquez from the Bureau of International Trade Relations said the difficulty with acquiring certificates of origin is free-trade agreements (FTAs) entail particulars, because partner-companies want different things.
This reality, Enriquez added, is a challenge for smaller companies that have to go through the same process that big companies have to comply with to pass trade regulations.
“At the end of the day, small companies don’t have the time to transition because you do business now. Your importer will not wait for you to become better, to acquire the necessary certification,” Enriquez said.
For the recommendations, the participants were divided into three groups, each concerning different issues: Product requirements and conformity, customs clearance and control, and rules on origin and trade.
These were added aside from the preliminary recommendations set by the ITC. The group that discussed product requirements and conformity highlighted three main points, namely, fumigation, labeling, and testing and certification. They called for a benchmark of fumigation costs in the Philippines and in other countries, and also for its sensitization among the private sector.
Transparency on fumigation was also recommended, as well as an increase in the number and presence of fumigators. “In some areas, in some sectors, in some markets, there is a competition among fumigators, which is good, because then you have competitive pricing. But for some products, for some sectors, there may not be enough offer[s] or none at all,” said Ursula Hermelink, ITC program manager on NTMs.
The group urged for an increase in access to information regarding labeling in order to have a “single-entry point” and to harmonize with other Asean countries. E-labeling was also pushed, along with the translation into local and business languages.
In terms of testing and certification, the group recommended the finalization of mutual recognition agreements and the training and coaching of micro, small and medium enterprises. Additionally, the mapping of service offers was pushed, as well as the identification of gaps in certification offers.
For customs clearance and control, there was a call to strengthen and support “project repeal” and the conduct of regulatory impact assessment in the national level. On the regional level, the group called for the continuation of technical assistance for the e-project funding.
Regarding rules of origin and other trade rules (ROO), a review of regulations was pushed concerning the policies of relevant agencies. An overall review of trade policies was also recommended—in this matter, the DTI as component head “will take the lead”—as well as a review of certification procedures.
Agencies were called to “laymanize” their regulations “for ease of understanding by end-users.” Also, the DTI was recommended to provide information on ROO, and other agencies were urged to strengthen the implementation of their citizens’ charters.
The survey was conducted from August 2014 to April 2016.
ITC plans to continue its collaboration with countries from across different continents to strengthen the understanding of the impact of NTMs to their respective business sectors, while ensuring that SMEs have a voice in the world market.
ITC has created online information hubs such as http://ntmsurvey.intracen.org and http://euromed.macmap.org as references and help desks for companies to check market access regulations as well as the customs taxes and duties required for their business transactions, on a per-product basis.