BIZ BUZZ: Cement tariffs tug-of-war

Talk about being caught between a rock and a hard place.

We’re referring to Trade Secretary Cristina Roque, who must soon make a Solomonic decision regarding tariffs on cement.

On one hand are the cement importers who fear that raising tariffs or safeguard duties too high—with around 16 percent as the threshold—will force them out of business as they will not be able to fully absorb the higher costs.

Then on the other are the local cement manufacturers who are lobbying for the import tariffs to shore up their production and gain a bigger share of the market, thus keeping their manufacturing operations that employ thousands of Filipinos humming along.

Some members of the Cement Importers Association of the Philippines, however, claim that “a troubling shadow of lobbyist pressure from local cement manufacturers looms large, threatening to tilt the playing field unfairly.”

A leaked working document from the Department of Trade and Industry revealed that imported cement from China was supposed to remain exempt from tariffs to help keep local cement prices low, but then there is intense pressure to remove China from the exempt list.

The cement importers who together account for as much as 32 percent of the local cement market argue that if Roque yields to the local manufacturing firms’ lobby, then costs will go up to the point that they may “decimate” their industry that supports some 5,000 jobs.

But then, if Roque listens to the local firms, they argue that the extra cost from the safeguard duty is not too much for the market to absorb, plus will redound to bigger benefits, including keeping job-generating manufacturing facilities within the country to ensure a stable supply.

Clearly, there are arguments supporting both sides; thus, Roque’s ability to discern whose interests she must primarily serve will be tested.

Here’s hoping she comes up with the decision that will help—rather than hurt—the cement industry and ultimately, the consumers.