The downstream plastic products manufacturers have asked for assurance from the government that the scheduled zero tariff on petrochemical products starting January 1, 2010 of the ASEAN Free Trade Area (AFTA) would not be hampered by any local laws preventing the implementation of the zero tariff regime in the region.

In a letter to Trade and Industry Secretary Peter B. Favila dated Dec. 14, 2009, the Philippine Plastic Industry Association (PPIA) expressed their apprehension over the possibility that the 10 percent tariff on plastic polymer resins, the imported raw materials, would not come down to zero by next year because it is still under temporary restraining order by the court.

“The PPIA is very much apprehensive that by next year, when all tariff barriers on import duty from ASEAN countries is removed; the 10% duty on plastic polymer resins under the court order (TRO) would still be retained. If this happens, it would create a much graver problem to our industry, when the AFTA-CEPT zero-tariff policy is imposed on all commodities next year,” PPIA president Alfonso Siy said.

The PPIA said that DTI Undersecretary Elmer C. Hernandez has informed them that AFTA contains provisions allowing its rules to supersede local laws, like the temporary restraining order issued by the Makati Regional Trial Court, retaining the 10 percent tariff on petrochemical products.

Despite this, Siy said that PPIA would like to be assured by Favila in writing that the tariff distortion between its raw material and finished products (now at zero duty) would become moot and academic once a new executive order is issued to implement the AFTA-CEPT zero tariff policy next year.

The PPIA would also want Favila to “mediate, if not suppress, any attempt to file a case against the Executive Secretary questioning the legality of a new executive order that would to put the current tariff distortion on plastic resins at status quo, or be retained at 10%.”

In addition, the PPIA has asked Favila to immediately inform them of any impending issuance of a new TOR that would suspend the implementation of the new EO noting they do not want to get caught unprepared again.

“All what we ask for is a level playing field for the sake of our industry,” Siy said.

According to the PPIA, the industry has more than P50 billion worth of investments with 278 plastic processors employing over 50,000 regular workers and 500,000 direct and indirect workers.