It was pointed out to her during the open forum that in many cases, the site-specific requirements for ECCs has been abused and used as tools of harassment by regulators. In a study made by the think-tank arm of the Federation of Philippine Industries, it documented several actual cases when regulators had used the ECC in closing enterprises that did not even emit any pollutants.

One classic case was when officials of the Laguna Lake Development Authority (LLDA) closed a small jewelry-making plant even without any evidence that it was polluting the lake, when it fact it is located very far from the lake.

There were also instances when non-issuance of ECCs in cities near the lake prevented investors from locating in the area.

Pedrosa assured that with the national mapping, the ECC process will no longer be a problem to investors. -- Abe P. Belena, PHILEXPORT News and Features <--back

2. Ermita orders PASG to review procedures

Executive Secretary Eduardo R. Ermita has ordered top officials of the Presidential Anti-Smuggling Group (PASG) to review their procedures in investigating jewelry makers suspected of smuggling gemstones.

The order was issued towards the end of a Malacanang dialogue which the Export development Council facilitated in Thursday. This is in response to complaints aired by leaders of the country’s jewelry industry of “harassments” resulting from PASG mission orders to their members demanding for import documents.

The jewelers, led by Luis Sicat, PHILEXPORT Trustee for the fine jewelry and fashion accessories sector, and heads of jewelry exporters’ groups presented to Ermita mission orders which threatened to confiscate jewelry items and detain the owners should the local jewelers fail to show the appropriate papers.

In the meeting, Atty. Roberto Bauzon of the legal department of the Bureau of Customs (BOC) confirmed the series of PASG operations that targeted jewelry stores in Greenhills, Binondo and Shangrila-Edsa. The owners had sought for a warrant from the customs legal office for the confiscation of suspected smuggled jewelries in the shelves of at least 13 companies, one of them an official of a jewelers group.

Bauzon clarified that the request for warrant was deferred until the standard legal procedure is followed and proofs of smuggling are found.

Nevertheless, the exporters told Ermita that to comply with the documentary requirements required by the PASG operatives, they submitted their documents to the NBI but the PASG people were nowhere to be found.

In their testimonies to Ermita, the jewelers explained that gemstones and other jewelry raw materials are tax-free under the Jewelry Industry Development Act of 1998. They admitted that another related problem is the difficulty in securing BOC accreditation for this purpose.

Getting their accreditation for tax exemption turned from bad to worse in 2006 when the processing was transferred from the office of Customs Deputy Commissioner Jairus Paguntalan to another office.

Also during the dialogue, one of the jewelry manufacturers found out that his company is also in the list that is subject to seizure warrants.

Speaking for the group, Sicat said that the country started going global almost at the same time as Thailand coaxing their jewelry sectors to the mainstream of business.

Today, Sicat revealed, Thailand already exports $5.7 billion worth of jewelry a year while the Philippines only exported $40 million last year.

Mia Faustmann, head of the Guild of Philippine Jewellers, Inc., seconded that it took them 12 years to lobby for the passage of a law to give the local industry some incentives so that it can grow faster, but 10 years later, that same law has not worked to their benefit. -- Abe P. Belena, PHILEXPORT News and Features <--back

3. Holiday decors, gifts exporters lost millions in product damages by Ondoy

Damages wrought by destructive typhoon Ondoy to holiday decors and gifts export businesses were expected to have reached millions of pesos.

Reeling from this situation, most of these companies participating in the Manila F.A.M.E. International slated this month are awaiting revenue results from the trade show to determine whether they will continue operations, Nora Halili Lao, PHILEXPORT trustee for the holiday decors and giftwares sector, in an interview said.

“They are still adopting a wait-and-see attitude depending on the Manila F.A.M.E. results. During the show, they will know if they still have buyers,” she said.

The Manila F.A.M.E is the biggest bi-annual trade show for home and lifestyle products. This year, it will take place this October 15-18 at the SMX Convention Center and the World Trade Center.

Lao recounted how typhoon Ondoy affected businesses of some members of Christmas Decor Producers and Exporters Association of the Philippines (CDPEAP) and the Philippine Chamber of Handicraft Industry (PCHI). Half of them are located in typhoon-devastated areas of Marikina, Antipolo, Taguig, Cainta and Pasig.

She said one exporter, Enriquez Handicraft Inc., lost $10,000 (around P470,000) worth of handicraft products ready for shipment to the United States due to typhoon Ondoy.

On the other hand, four other exporters – CD Handicrafts Inc., ARH Handicraft, Getzon Leathergoods and Aineo Handicraft incurred cumulative revenue losses of P1 million, she added. Lao said the owner of CD handicrafts shelled out personal money to help her suppliers recover. Their homes were either lost or damaged by the September 26 typhoon.

Despite this, she said most of the exporters of holiday decors and giftwares were thankful for the holding of August Buy Pinoy Exporters Fair and this month’s Pamasko ni Kuya fair where they were able to unload most of their stocks.

“Without these events, their losses (due to the typhoon) could be higher,” she stressed.

Amid another devastating blow to the export sector’s growth, Lao renewed their appeal to the government to fast track the release of the P1-billion Export Support Fund (ESF).

The ESF was provided by the government to help industry players ride out the global crisis. It is meant to finance export development and promotions activities of local exporters. -- Danielle Venz, PHILEXPORT News and Features <--back

4. SPS to facilitate trade flow and support dev’t goals

The country can use agriculture, sanitary and phytosanitary (SPS) measures to promote trade with other countries and at the same time support its development goals, a trade expert said.

Ma. Dolores Bernabe, who has worked as an independent consultant for various international projects on trade issues, said the Philippines should perceive SPS as both an offensive and defensive tool in the same way other countries are using it.

“This involves developing our capability to have our own SPS so we can use it, harmonizing also some of our SPS (with that of other countries) and (make our) export target in line with international standards of target markets,” she said.

Bernabe suggested that if the Philippines wants to block “exports” through SPS measures like done by other countries, it should develop its scientific capability to use these. “Blocking” exports from other countries should be done on a legitimate, scientific rationale rather than just as a retaliatory measure, she explained.

“Tariffs they say is already a secondary issue when it comes to trade barriers because some countries reduce their tariffs to zero. But they are now able to block exports from developing countries by using legitimate SPS measures,” she said.

This could not level the playing field, she said, noting “It is a matter of national interest, they use this trade mechanism to support their development objectives.”

Provisions in SPS measures and technical barriers to trade are covered in the negotiations for free trade agreement (FTA) and World Trade Organization (WTO).

Moreover, Bernabe said despite the deadlock in the WTO talks, the Philippines should not abandon the forum for trade negotiations.

“While FTAs have aggressive trade liberalization program, it is important that the country does not abandon WTO because if there are disagreements in your FTA, your WTO commitments are your fallback,” she stressed.

“Actually, you can consider them as parallel tracks but because there is a delay in the WTO, we lean on the other track…For the country to benefit from WTO, there is a need to maximize the flexibility that is available for the developing countries…,” she added.

Bernabe has been an active member of the core group of the Department of Agriculture’s Task Force on WTO Agreement Renegotiations (TF-WAR), a multi-sectoral group that reviews and reacts to developments in agricultural agreements. -- Danielle Venz, PHILEXPORT News and Features <--back

5. Free trade crucial to maximizing FDIs

Asian and developing countries like the Philippines with free trade regime that promotes competition could maximize the benefits of foreign direct investments (FDIs).

This was stressed by Robert D. Anderson, Counsellor of World Trade Organization Secretariat, in a seminar organized by the International Trade Centre in cooperation with the Universal Access to Competitiveness and Trade (U-ACT).

Anderson noted that the business environment can affect both the magnitude and quality of FDIs, which are crucial for development and growth.

“Host countries with liberal trade policies more likely attract FDI that is export-oriented, in addition to seeking to supply the domestic market,” he said.

To lure FDIs, Anderson underscored the need for countries to implement policies that lower risk, such as guarantees against the right to own and transparency of investment regime.

Likewise, he cited the important role of competitive markets.

“A foreign investor in a competitive business environment is more likely to bring in and maintain top quality bundle of productive assets such as state-of-the-art technology and entrepreneurial know-how,” he explained.

Anderson said competition policy was included on the international trade agenda considering the ability of anti-competitive practices to hinder market access and undermine the intended benefits of trade liberalization.

However, while competition policy is important, Asian and other developing countries are against WTO negotiations on such policy.

Anderson traced this to concerns on costs of implementing a WTO agreement on competition policy and required domestic laws/institutions and the perceived intrusion on the developing countries’ policy space.

He said provisions on such policies in international trade and similar treaties should thus be structured to optimize their benefits for the participating countries. -- Danielle Venz, PHILEXPORT News and Features <--back