“Dumped cement from Vietnam threatens the capability of local cement manufacturers to generate thousands of jobs for Filipinos and contribute significantly to over-all economic development”
We discussed this issue recently and it bears repeating at this point since the new administration has pledged to accelerate infrastructure projects to sustain the momentum of economic rebound in the next six years.
We refer to the important role played by the cement and steel industries in realizing the government’s vision of building more and better roads and bridges, airports and ports, and mass transport facilities such as railways in support of economic development goals.
But there’s a real threat that casts a long shadow on the government’s ambitious infrastructure development program: the dumping of cement into the country from Vietnam that could lead to serious financial losses or even the shutdown of local cement manufacturers, unless government takes stern measures.
The Cement Manufacturers Association of the Philippines (CEMAP) is understandably concerned over the dumping of cheap cement into the country.
Domestic capacity now stands at approximately 47 million tons. This capacity significantly exceeds domestic demand and assures stability of local cement supply.
But dumped cement from Vietnam threatens the capability of local cement manufacturers to generate thousands of jobs for Filipinos and contribute significantly to over-all economic development.
To address threats to the continued existence of the local cement industry, cement manufacturers have filed for trade remedies, specifically an anti-dumping case against certain Vietnamese manufacturers and traders, and a petition for the extension of safeguard measures.
What they want is for government to promote a level playing field, which ultimately will benefit our country, through job creation, higher tax collection, more local and foreign investments, non-dependence on imports, not to mention the preservation of the country’s dollar reserves.
At issue here is this: Should global free trade be allowed to flourish unrestrained by remedies such as anti-dumping measures?
A former top official of the World Bank doesn’t think so: “The most appealing option is to get rid of anti-dumping laws and to put nothing in their place. Then all of the evils of such policy – its power politics, its bad economics, and its corrupted law – would be eliminated.”
In fact, anti-dumping laws are essential to the continued growth of domestic industries.
It is true that those who fail to learn from history are condemned to repeat it, as we’ve learned from wise counsel.
In the late 1800s, for instance, Britain accounted for more than the world’s manufacturing output than any other country.
Its domestic industries had the lowest production costs, most advanced manufacturing capabilities, and the dominant position of its shipping and banking industries in world commerce.
But the British government decided against imposing tariffs on dumped imports from other economic powers during that period, led by the United States and Germany.
On the contrary, both the U.S. and Germany imposed tariffs on dumped imports to support their domestic industries; this allowed them to foster an environment of higher and continued levels of capital investments to improve production technologies which in the end lowered costs, increased output and efficiencies, and enhanced the overall global competitiveness of their locally manufactured goods in both domestic and foreign markets.
By ignoring the pervasive dumping of goods into its shores, Britain’s industrial base, notably in iron, coal, and textile, among others, suffered irreparable damage.
The country was also unable to generate capital to adequately invest in new, upcoming industries such as electrical products, specialty steel, industrial chemicals, and pharmaceuticals.
Thus, it missed out on the so-called “Second Industrial Revolution” that other capitalist countries were able to successfully take part in to propel phenomenal economic growth.
The Philippines should learn lessons from all this and heed the call for protection from dumping sounded by local cement manufacturers.
Our Constitution provides that “the State shall pursue a trade policy that serves the general welfare and utilizes all forms and arrangements of exchange on the basis of equality and reciprocity.”
Moreover, it directs the government to “promote the preferential use of Filipino labor, domestic materials and locally produced goods, and adopt measures that help make them competitive.”
We don’t have to look far to guide us in making the right choices in crafting our economic policies. It’s all there in our fundamental law.
(Email: ernhil@yahoo.com)