Car importers asked the government to reduce import duties on European vehicles to make them more affordable and reduce the advantage enjoyed by Japanese and other Asian models.
European car brands Volkswagen, BMW, Mercedez Benz and Peugeot submitted a position paper to Board of Investments, asking the government to include automotive tariff lines in the proposed Philippines-European Union Free Trade Agreement.
“What we are asking, basically, is a level playing field for all players. If the government can level the playing field, then all of a sudden European cars will be more affordable,” Volkswagen Philippines president and chief executive John Philip Orbeta said over the weekend.
The group said if tariff lines would be included in the bilateral free trade agreement, European original equipment manufacturers with representation in the Philippines could expect a significant reduction in duties and taxes.
Vehicles from Europe are currently taxed 30-percent, compared to zero tariff accorded to Japanese vehicles.
The four European car brands decided to come up with its position paper in response to a separate position paper submitted by Chamber of Automotive Manufacturers of the Philippines Inc. which asked BOI to exclude tariff lines on European automotive products in the ongoing discussions on Philippines-EU FTA.
Campi is a group of automotive makers and distributors led by Japanese assemblers. “With all due fairness, we informed Campi that we will also submit our own [position paper]. We told them that we respect their position, but allow us to give our position also,” Orbeta said.
Campi submitted its position to BOI as early as October 2015 while the European group sent its letter only two weeks ago.
European OEMs asked BOI to level the tariff on automotive imports from Europe with those of Japanese automotive players which enjoy 0 percent tariff and Korean players with 5-percent tariff.
The European Union earlier said it was willing to proceed with the formal negotiations with the Philippines for the bilateral agreement with the approval of the competition policy.
The EU Competition cluster cited the importance of a competition chapter in any FTA deal with other countries to ensure market access and rules for fair trade practices.