The United States Agency for International Development (USAID) said the Philippines may need to review and reduce its non-tariff measures (NTMs) to ensure stable food supply especially during this new coronavirus disease 2019 (COVID-19) pandemic.
Jenna Diallo, deputy director for economic development of the USAID made the call at a webinar on Philippine Trade Policy Response Amid COVID 19: NTMs on Food as Essential Item – Fishery and Aquaculture-based Food hosted by the Department of Trade and Industry.
Diallo said while the Philippines has dropped more than half of its tariff lines to between zero and 5 percent for Asean and has eliminated tariffs on approximately 99 percent of all goods from region, it still has a total of 854 NTMs involving at least 37 issuing institutions.
Diallo observed the use of NTMs by countries as tariffs fall because of free trade.
NTMs are prohibitions or specific market requirements that make importation or exportation of products difficult and costly. These also include discretionary and improper application measures such as sanitary and phytosanitary measures and other technical barriers to trade which may include extra licensing requirements duplicate of health certificates or distribution restrictions.
“Non- tariff measures imposed by a country can negatively impact its businesses and consumers and teams can hurt exporters in two ways. Export non-tariff measures add to the cost of doing business, and make it harder for exporters to tap international markets.
Import non-tariff measures make sourcing of imported materials difficult. And it’s notable that a high proportion of the goods export or sell abroad have substantial import of content,” Diallo said.
In the case of the Philippines, the OECD estimates the import content of its total exports at 23.4 percent in 2016.
Diallo illustrated her point by citing how a small indigenous weaving company in Iloilo which plans to export to Cambodia has to compete with fabrics from other countries, and to satisfy the destination’s NTMs, but also has to satisfy the Philippines permit and clearance requirements imposed by domestic agencies before it is even allowed to export.
Diallo expressed hope actionable measures will be identified at the dialogue even she assured USAID’s support efforts by the Philippines to address trade barriers by collaborating with key private sector and government stakeholders to address the issue.