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The document discusses tariffs and trade barriers in the Philippines, explaining how tariffs protect local industries and regulate imports and exports. It outlines various trade policies, including national, bilateral, and international policies, along with examples of their implementation. Additionally, it highlights the impact of globalization on Philippine trade, particularly in sectors like electronics and BPO.

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Carolyn Dela Roca
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10 views5 pages

Contemp Exp

The document discusses tariffs and trade barriers in the Philippines, explaining how tariffs protect local industries and regulate imports and exports. It outlines various trade policies, including national, bilateral, and international policies, along with examples of their implementation. Additionally, it highlights the impact of globalization on Philippine trade, particularly in sectors like electronics and BPO.

Uploaded by

Carolyn Dela Roca
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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1.

Tariffs
Definition:

Tariffs are taxes imposed by the government on imported or exported goods. The Philippines
imposes tariffs to protect local industries, generate government revenue, and control trade
balance.

How Tariffs Work:

• When the government imposes a high tariff on imported goods, foreign products become
more expensive, making local goods more competitive.
• Lower tariffs, on the other hand, make imported goods cheaper, giving consumers more
choices but also increasing competition for local businesses.

Example (Philippines):

• Rice Tariffication Law (Republic Act 11203 - 2019):


o Before 2019, the Philippine government restricted rice imports to protect local
farmers.
o The law removed import restrictions but imposed tariffs on imported rice:
▪ 35% tariff on ASEAN rice imports
▪ 50% tariff on non-ASEAN rice imports
o Effect: Cheaper imported rice entered the market, lowering prices, but Filipino
rice farmers faced stronger competition.
• Philippine Tariffs on Automobiles (CBU Vehicles):
o The government imposes tariffs on imported cars to encourage local car
assembly.
o Imported cars from non-ASEAN countries (e.g., Japan, Korea, the U.S.) have
higher tariffs than those from ASEAN countries due to trade agreements.

2. Trade Barriers
Definition:

Trade barriers are restrictions or regulations that make it harder for foreign products to enter
the local market. These can be tariffs, quotas, licensing requirements, or outright bans.

Types of Trade Barriers (Philippine Examples):

1. Import Quotas – Limits on the quantity of certain imports.


o Example: Before the Rice Tariffication Law, the Philippines limited rice
imports to protect local farmers.
2. Subsidies – The government provides financial support to local industries to make them
more competitive.
o Example: The Philippine government subsidizes local coconut farmers through
programs like the Philippine Coconut Authority (PCA).
3. Embargoes – A complete ban on trade with a country.
o Example: The Philippines banned the import of pork products from African
Swine Fever (ASF)-affected countries like China and Vietnam.
4. Non-Tariff Barriers (Strict Import Rules)
o Example: The Bureau of Customs requires special permits for imported
medicines, making it harder for foreign pharmaceuticals to enter the Philippine
market.

3. Safety Standards and Quality Control


Definition:

Safety regulations ensure that imported products meet Philippine health and safety
standards before being sold to consumers.

Example (Philippines):

• Food and Drug Administration (FDA) Import Requirements:


o The FDA regulates imported medicines and food products to ensure they meet
safety standards.
o Example: Some Korean and Japanese instant noodles were banned in the
Philippines due to high levels of carcinogens (harmful chemicals).
• DA Quarantine Restrictions on Imported Meat:
o The Department of Agriculture inspects imported meat to ensure they are free
from diseases like African Swine Fever and Bird Flu.
o In 2020, the government restricted pork imports from Germany due to ASF
concerns.

Types of Trade Policies


Trade policies are classified into different types based on their scope and purpose.

1. National Trade Policy (Philippines-Focused Trade Policy)

Definition:
A national trade policy is a set of rules that protect local industries and regulate trade within the
country.
Example:

• Philippine Coconut Industry Protection:


o The Philippine government limits coconut exports to ensure that local producers
get fair prices.
o The Coconut Levy Fund Act supports Filipino coconut farmers by using tariff
revenues to invest in local coconut farming.
• Sugar Import Restrictions:
o The government controls the importation of sugar to protect Filipino sugar
farmers.
o High tariffs on imported sugar help keep local sugar prices stable.

2. Bilateral Trade Policy (Philippines and Another Country)

Definition:
A bilateral trade policy is an agreement between two countries that sets trade rules between
them.

Example:

• Philippines-Japan Economic Partnership Agreement (PJEPA):


o The Philippines and Japan signed an agreement allowing Filipino nurses and
caregivers to work in Japan with reduced restrictions.
o In return, the Philippines lowered tariffs on Japanese industrial goods like
electronics and cars.
• Philippines-United States Banana Trade:
o The U.S. agreed to lower tariffs on Philippine bananas, allowing more exports.
o This helped banana farmers in Mindanao sell more products abroad.

3. International Trade Policy (Global Trade Agreements Involving the


Philippines)

Definition:
An international trade policy is a set of trade rules governed by global organizations to
promote fair trade between countries.

Key Global Organizations and Their Role in the Philippines:

1. World Trade Organization (WTO) – The Philippines follows WTO rules to ensure fair
trade with other countries.
o Example: The Philippines filed a complaint against Thailand at the WTO over
unfair taxes on Philippine cigarettes.
2. ASEAN Free Trade Area (AFTA) – A regional agreement between ASEAN countries
(Philippines, Malaysia, Indonesia, etc.) to reduce tariffs on traded goods.
o Example: The Philippines imports duty-free rice from Vietnam and Thailand
under AFTA, making rice imports cheaper.

Trade Policy and the International Economy


1. Developed Countries (U.S., Japan, Europe) – Open Market Economies

• Developed nations favor free trade policies that reduce restrictions and allow easy
access to markets.
• Example: The Philippines exports electronics (e.g., semiconductors) to the U.S. and
Japan under free trade agreements.

2. Developing Countries (Philippines, Vietnam, India) – Partial Protectionism

• Developing nations often protect their industries while allowing selective free trade.
• Example: The Philippines protects its agricultural sector (e.g., rice, sugar) but
promotes the export of electronics and call center services.

3. Globalization and Philippine Trade

Globalization has increased Philippine trade opportunities by connecting local businesses to


the world.

• Example: The BPO (Business Process Outsourcing) industry has grown because of
foreign investment from the U.S. and Europe.

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