RP skeptical about AFTA deal

RP skeptical about AFTA deal

MANILA (AFP): Recession-hit local manufacturers face grim prospects with the Philippines set to slash tariff lines in 11 months as part of free trade commitments, a prominent industrialist warned on Monday.

"The countdown to globalization is now with us and in 11 months, 85 percent of the tariff line items in ASEAN will be reduced to 0-5 percent," Federation of Philippine Industries chairman Raul Concepcion said in a statement.

"What this means is that just as local industries are reeling from a severe recession, there will be a flood of cheap imported goods, thus greatly reducing the demand for local products."

The six more developed Association of Southeast Asian Nations (ASEAN) members -- Brunei, Indonesia, Malaysia, the Philippines, Singapore and Thailand -- agreed in December to create a free- trade area with tariffs of five percent or less by 2002.

Vietnam has until 2006 and Laos and Myanmar until 2008 to catch up with their more developed counterparts.

Separately, Manila has agreed to remove all tariffs on certain information technology products by the end of the year under a commitment with the World Trade Organization.

Concepcion said industrial production in the Philippines had fallen for 11 consecutive months, with sales down 16.1 percent and 38.1 percent of companies operating below 70 percent of capacity.

Under pressure from local manufacturers, the Philippine government last month adjusted import tariffs on certain textile, steel, petrochemical products for at least one year to help them cope with the Asian financial crisis.