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Punitive tariff on Viet cement

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As international trade tries to regain its footing, lost during the almost two years of pandemic disruption, problems of the past are also making a strong comeback.

The Department of Trade and Industry (DTI) has imposed provisional anti-dumping duties on specific Portland cement brands imported from Vietnam based on the results of a preliminary determination on the anti-dumping petition filed by Republic Cement and Building Materials Inc. (RCBM), CEMEX — Solid Cement Corporation/Apo Cement Corporation and Holcim Philippines Inc.

Preliminary determination showed nine out of 16 Vietnamese exporters of type 1 cement and four out of 12 exporters of type 1P cement were found engaging in unfair practice that caused injury to the domestic cement industry.

Provisional anti-dumping duties on type 1 cement will range from $1.02 per metric ton (MT) to $10.53 per MT, or 2.69 percent to 31.87 percent of the export price.

The nine exporters account for 82 percent of total imports of type 1 cement.

Meanwhile, provisional anti-dumping duties on Vietnam’s type 1P cement exports will range from $1.16/MT to $12.79/MT, or 3.8 percent to 29.2 percent of the export price.

These provisional duties are estimated to add P2.01 to P25.08 to the import cost of a 40-kilogram (kg) bag of cement but the DTI said the additional cost will not be passed on to consumers due to the strong competition in the market.

Competition reins in prices
With local cement manufacturers having enough capacity to meet domestic demand, Trade Secretary Ramon Lopez explained that prices are not bound to rise.

“We do not anticipate that these duties will result to an increase in the retail prices of cement because its effect on landed cost is minimal. Any price increases in imported cement will be discouraged by competition from domestic cement producers,” Lopez noted.

He added “the provisional anti-dumping duties will be imposed only on specific Vietnamese exporters found to be dumping cement to the Philippines. Vietnamese exporters who are not dumping can continue to export cement without having to post the provisional anti-dumping cash bond.”

DTI’s findings also show that during the investigation period, dumped cement from Vietnam accounted for 55 percent of the total imports from July 2019 to December 2020.

Dumping occurs when exporters sell their products at far lower than the market price. Under the World Trade Organization Anti-Dumping Agreement, WTO member countries are entitled to impose anti-dumping duties to mitigate dumping-related injury to the domestic industry.

The DTI’s provisional anti-dumping duties are equal to the dumping margin, which is the difference between Vietnam’s domestic and export prices. The case will be forwarded to the Tariff Commission for a formal investigation to determine if a permanent anti-dumping duty should be imposed.

Vietnamese cement exports to the Philippines accounted for 46 percent of that country’s export volume for the period of 2017 to 2020.

According to DTI, local cement makers have enough capacity to meet the requirements of residential, institutional, and corporate consumers including the requirements of the government’s “Build, Build, Build” programs.

Further, the competitive environment in the domestic market for cement ensures that pricing and supply will remain stable.

“We do not expect the provisional dumping duties to have an impact on the government’s Build, Build, Build program because domestic cement producers have the capacity to supply the requirements of the program’s projects and strong competition among producers and importers is expected to keep prices stable,” Lopez said.

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