Philippines asks US to remove tariff

The Philippines is trying to convince Washington that a new domestic crackdown on forced-labor goods should be enough to reopen a tariff decision that hit its exports last month. Philippine trade officials say the United States has already received a joint administrative order, or JAO, that sets out how Manila will investigate and prohibit the import of goods produced wholly or partly through forced labor. The filing is part of the government’s effort to remove a 12.5% U.S. tariff imposed on Philippine goods under a broader Section 301 action. U.S. officials announced that action on July 23, saying 60 economies had failed to impose and effectively enforce bans on imports made with forced labor. ### Why did the United States put a 12.5% tariff on Philippine goods? The Office of the U.S. Trade Representative said on July 23 that it was taking final action, at President Donald Trump’s direction, under Section 301 of the Trade Act of 1974 against 60 economies over failures to block imports made with forced labor. USTR said the investigations covered the top 60 U.S. trading partners and that the action followed investigations launched on March 12 and findings published on June 2. (mb.com.ph) The Philippines was placed in the group facing a 12.5% additional duty because U.S. officials found it had “failed to impose and effectively enforce a forced labor import prohibition,” according to Philippine government and local media accounts citing the USTR action. Manila has rejected the allegation while continuing talks with Washington. ### What exactly did Manila send to Washington? The Philippine government signed the JAO on July 23, with Trade Secretary Ma. (ustr.gov) Cristina Roque, Finance Secretary Frederick Go and Labor Secretary Francis Tolentino named as signatories. The order establishes rules for investigating and prohibiting the importation of goods produced wholly or in part through forced labor, according to the Philippine News Agency. (pna.gov.ph) Department of Trade and Industry Undersecretary Ceferino Rodolfo told Manila Bulletin that the government was coordinating closely with USTR and that the tariff review was prompted by the JAO submission. Rodolfo said the order contains an explicit ban on the entry of imported goods suspected or determined to have been produced, wholly or in part, through forced labor. (pna.gov.ph) ### Why does Manila think the tariff can still be removed? A July 6 Philippine submission to USTR argued that the country should be treated as a trading partner with a strong legal and institutional regime to address forced labor, according to Manila Bulletin. That filing, attributed to DTI Undersecretary Allan Gepty, said at minimum the Philippines should be seen as having a partial regime that prevents the importation of certain forced-labor goods. (mb.com.ph) Philippine officials have also argued that much of the country’s export trade should not be caught by the measure. Manila Standard reported that DTI said more than $11.98 billion of Philippine exports to the United States, or 66% of total shipments, would be exempt from Washington’s higher reciprocal tariff action, though the forced-labor tariff remains a separate issue now under review. (mb.com.ph) ### Who is handling the Philippine response? Philippine Ambassador to the United States Jose Manuel Romualdez said last week that DTI Undersecretary Allan Gepty would lead talks on reducing the additional 12.5% tariff. The Palace has also said the Philippines will keep engaging the United States on tariffs and forced labor. Trade Secretary Roque said the Philippines values its strategic relationship with the United States and wants trade to remain “intact, resilient, and stable,” according to the Philippine News Agency. (manilastandard.net) Her statement came after the USTR finding was released. ### What happens next in Washington? USTR’s July 23 notice says the tariff action is meant to remain in place to obtain the elimination of the acts, policies and practices it found actionable under Section 301. (msn.com) That means any Philippine relief now depends on whether U.S. trade officials decide the new order and any follow-through meet Washington’s standard for an effective forced-labor import ban. (pna.gov.ph) The next public reference point is the USTR Section 301 forced-labor investigation docket and related notices, which already include the March 12 initiation, the June 2 proposed action and the July 23 final action. Philippine officials have said the United States has received the JAO and is reviewing it. (ustr.gov) (federalregister.gov)