‘Trade diversion’ in cement noted

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    Importers have shifted their cement sourcing to evade paying additional duties on the product, according to the Department of Trade and Industry (DTI).

    The DTI in Department Administrative Order 21-02 on March 5, 2021 amended the list of countries exempt from payment of cement safeguards.

    The DAO delisted from exemption Chile, Israel, Slovenia, Slovakia, Poland, Lithuania, Latvia, Hungary, Estonia, Czech Republic, Republic of Korea, and Indonesia.

    Without providing details, a DTI source said imports shifted to Indonesia and other countries during the past year in what is termed as “ trade diversion” by importers to enjoy the exemption.

    The source said a review of recent available import data showed that some countries in Annex A — a list of developing countries excluded from the safeguard measure that meet the de-minimis level of import volume share or less than 3 percent to total cement importation — have exceeded the 3-percent threshold.

    The source added the DTI recently reviewed the status of certain countries/economies to be considered as “developing” and note that a few of them are considered high income economies, based on World Bank data.

    Cement are slapped additional duty of P9.80 per bag beginning October 2020, the second year of the safeguards imposition.