Tariff Reform Program Overview
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Questions and Answers

What general economic approach did TRP-I shift from and to?

  • From protectionism to liberalization
  • From market regulation to deregulation
  • From import-substitution to export promotion (correct)
  • From export promotion to import-substitution

What was the approximate decline in average nominal tariff from 1981 to the end of TRP-I?

  • From 42% to 26%
  • From 42% to 28% (correct)
  • From 42% to 32%
  • From 42% to 38%

What specific structural adjustment program was a key component alongside TRP-I?

  • Price Stabilization Program
  • Investment Promotion Program
  • Import Liberalization Program (correct)
  • Export Assistance Program

What was the nominal tariff band after the implementation of TRP-I?

<p>10%-50% (A)</p> Signup and view all the answers

What was the impact of TRP-I on effective protection rates for manufacturing industries?

<p>Decreased from 66% to 36% (D)</p> Signup and view all the answers

What was the primary goal of TRP-II?

<p>To further decrease tariffs and distribute protection evenly (A)</p> Signup and view all the answers

What document provides classification principles for uniform goods classification in the Harmonized System?

<p>General Rules for the Interpretation of the Harmonized System (C)</p> Signup and view all the answers

By the end of TRP-I, which industry continued to experience a low effective protection rate?

<p>Agricultural (B)</p> Signup and view all the answers

Which of the following legal texts has the same legal force as the General Rules for the Interpretation of the Harmonized System?

<p>Section and Chapter Notes (B)</p> Signup and view all the answers

What is the primary commitment of contracting parties under the International Convention on the Harmonized System?

<p>To use the HS up to the 6-digit level for customs tariffs (D)</p> Signup and view all the answers

What year did TRP-I begin its implementation?

<p>1981 (D)</p> Signup and view all the answers

Which body is responsible for regularly updating the Harmonized System?

<p>Harmonized System Committee (D)</p> Signup and view all the answers

How are headings arranged within the Harmonized System?

<p>Systematically by degree of processing (D)</p> Signup and view all the answers

What was the primary purpose of the comprehensive review undertaken in 2005?

<p>To establish the MFN tariff structure for 2006 to 2010 (C)</p> Signup and view all the answers

Which item was NOT included in the retained 2010 tariff levels under EO 61?

<p>Dyestuffs (B)</p> Signup and view all the answers

What was the outcome of the comprehensive review conducted in 2010?

<p>Issuance of EO 61 maintaining tariffs at 2010 levels (A)</p> Signup and view all the answers

What significant changes were made during the 2010 tariff review regarding tariff lines?

<p>Tariff rates for 193 lines were reduced while others were maintained (C)</p> Signup and view all the answers

What was the main goal of the tariff review undertaken in 2015?

<p>To outline tariffs for 2016 to 2020 (A)</p> Signup and view all the answers

Which specific items had their tariffs increased under EO 61?

<p>Electric transformers exceeding 20,000 kVA (A)</p> Signup and view all the answers

Why was the comprehensive tariff review carried out in 2005 critical for industries?

<p>It aimed to create a stable environment for business planning. (B)</p> Signup and view all the answers

When did the outcomes of the comprehensive review conducted in 2010 officially take effect?

<p>14 January 2012 (B)</p> Signup and view all the answers

What was the primary purpose of TRP-II?

<p>To enhance local industries' competitiveness and reduce costs (C)</p> Signup and view all the answers

What significant change occurred to the average nominal tariff by the end of the review period in 1995?

<p>It dropped from 28% to 20% (D)</p> Signup and view all the answers

What impact did TRP-II have on agricultural tariffs by 1995?

<p>Agricultural tariffs decreased by 20%, from 35% to 28%. (D)</p> Signup and view all the answers

What change occurred to the number of Harmonized System lines under TRP-II?

<p>The number decreased by 10%. (D)</p> Signup and view all the answers

When was the TRP-II formally implemented?

<p>24 August 1991 (C)</p> Signup and view all the answers

What was the overall average EPR level before EO 470?

<p>25% (B)</p> Signup and view all the answers

What was a particular consequence of the tariff adjustments in TRP-II for local manufacturing industries?

<p>Manufacturing tariffs were reduced to more reasonable levels. (A)</p> Signup and view all the answers

What was one of the objectives of TRP-III following TRP-II?

<p>To shift towards uniformity in tariff protection levels (D)</p> Signup and view all the answers

What is the primary responsibility of the Harmonized System Committee as described in Article 7 of the HS Convention?

<p>To propose amendments to the HS Convention as needed. (C)</p> Signup and view all the answers

How often can amendments to the HS Nomenclature be recommended according to the Harmonized System Committee?

<p>Every four to six years. (B)</p> Signup and view all the answers

Which of the following amendments was approved on February 14, 1995, by the NEDA Board?

<p>1992 amendments. (D)</p> Signup and view all the answers

What aspect was NOT covered in the HS 2017 nomenclature changes?

<p>Agriculture machinery classifications. (C)</p> Signup and view all the answers

What was the date of approval for the 2007 HS amendments by the NEDA Board?

<p>September 18, 2007. (C)</p> Signup and view all the answers

Which organization requested the inclusion of bamboo and rattan products in HS 2017?

<p>International Network for Bamboo and Rattan (INBAR). (A)</p> Signup and view all the answers

How many sets of amendments were included in the HS 2017 nomenclature?

<p>233 sets. (B)</p> Signup and view all the answers

Which of the following is associated with the Controlled Chemicals under the HS 2017 Nomenclature?

<p>Pesticides limited by the Stockholm Convention. (D)</p> Signup and view all the answers

Flashcards

Tariff Reform Program (TRP)

An ongoing review of the Philippine tariff system to match economic and trade needs.

TRP-I

The first Tariff Reform Program aimed at reducing overprotectionism from 1981 to 1985.

Import-Substitution to Export Promotion

Shift in TRP-I to promote exports instead of relying on import substitutes.

Tariff Band Narrowing

The reduction in tariff ranges from 10%-100% to 10%-50% during TRP-I.

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Average Nominal Tariff Reduction (TRP-I)

The nominal tariff decreased from 42% to 28% during TRP-I.

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Effective Protection Rates (EPRs)

EPRs for manufacturing fell from 66% to 36% during TRP-I.

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TRP-II

The second Tariff Reform Program aimed at further tariff reductions started in 1991.

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Executive Order 470

Launched TRP-II, effective in reducing various tariff rates in 1991.

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Tariff Rates Shift (TRP-II)

By 1995, 95% of tariff lines were at rates of 3%, 10%, 20%, and 30%.

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Nominal Tariff Average Reduction (TRP-II)

Average nominal tariff decreased from 28% to 20% under TRP-II.

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TRP-III

The third Tariff Reform Program focused on liberalizing trade further.

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Critical Industries Support (TRP-III)

Plans developed to support sectors like steel, textile, and shipping in TRP-III.

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Comprehensive Review of MFN Tariff Structure

Periodic reviews to ensure tariff transparency and predictability in trade.

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Comprehensive Review 2005

Set tariff structures from 2006 to 2010, effective in 2007.

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Follow-up Review 2010

Established tariff framework for 2011 to 2015 after previous assessments.

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EO 61

Issued in 2011 to maintain 2010 tariff levels for most tariff lines.

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Harmonized System (HS)

International classification for customs tariffs, important for trade statistics.

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General Rules for Interpretation (GIR)

Principles that guide the classification of goods under the HS.

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Harmonized System Committee

A WCO body meeting biannually to update HS for participating states.

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HS Amendments

Changes made to the HS nomenclature from 1992 to 2017 for better trade classification.

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HS 2017 Nomenclature Changes

233 amendments aimed at environmental and social issues among others in HS 2017.

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Environmental Product Monitoring

Enhanced monitoring of environmental products under international treaties due to HS 2017 updates.

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National Customs Tariff

Customs tariff system in each country based on HS nomenclature.

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Periodic Reviews Importance

Essential for maintaining tariff structure relevance and trade predictability.

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Transparency in Trade

Ensures businesses can plan strategically based on tariff structures.

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Trade Patterns Adaptation

Adjusting tariff systems to match evolving global trade dynamics.

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Effective Policy Implementation

Contributions to trade efficiency and economic competitiveness through tariff reforms.

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Harmonization of Tariff Codes

Standardization of tariff codes across countries to simplify trade.

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Study Notes

Tariff Reform Program (TRP) Overview

  • Ongoing review of the Philippine tariff system to adapt to economic needs, trade patterns, and technological advancements.
  • Four TRPs initiated since 1980, aimed to make tariff structures more efficient and competitive.

Tariff Reform Program I (TRP-I)

  • Implemented from 1981 to 1985 to combat negative impacts of overprotectionism in the 1970s.
  • Shifted focus from import-substitution to export promotion to enhance competitiveness.
  • Narrowed the tariff band from 10%-100% down to 10%-50%.
  • Average nominal tariff decreased from 42% to 28% during the program.
  • Effective Protection Rates (EPRs) for manufacturing fell from 66% to 36%, while primary and agricultural industries remained low at 3%.

Tariff Reform Program II (TRP-II)

  • Launched under Executive Order 470 on July 20, 1991, with implementation from August 24, 1991.
  • Aimed to further reduce tariffs and distribute protection uniformly across industries.
  • Nearly 95% of tariff lines resulted in duties at rates of 3%, 10%, 20%, and 30% by July 1995.
  • Average nominal tariff reduced from 28% to 20%.
  • EPRs declined from 25% before EO 470 to 19% after its implementation.

Tariff Reform Program III (TRP-III)

  • Objective to further liberalize trade by standardizing tariff rates across sectors.
  • Plans developed to support critical industries like steel, textile, and shipping.

Comprehensive Review of the MFN Tariff Structure

  • Periodic reviews undertaken to maintain transparency and predictability in trade for strategic business planning.
  • Comprehensive review in 2005 set tariff structure from 2006 to 2010; results effective in 2007.
  • Follow-up review in 2010 established the tariff framework for 2011 to 2015.
  • EO 61 issued on October 17, 2011, sustaining 2010 tariff levels for 96% of tariff lines.
  • General Rules for Interpretation of the HS establish classification principles.
  • Section and Chapter Notes supplement GIR, providing definitions and criteria for classification.
  • Systematic arrangement of headings, generally by processing degree.

International Convention on the Harmonized System

  • An intergovernmental commitment mandating the use of HS for national customs tariff and statistics up to the 6-digit level.

Harmonized System Committee

  • A working body of the WCO with representatives from contracting parties, meeting biannually to update the HS.
  • Sets intervals of four to six years for recommending amendments to the HS Nomenclature.

HS Amendments and Adoption

  • Series of amendments from 1992 to 2017, with approvals documented by the NEDA Board.
  • Each amendment aimed at improving classification and addressing evolving trade needs.

Changes in HS 2017 Nomenclature

  • 233 amendments focused on environmental and social issues and improved classification standards for goods related to food security, anti-malarial commodities, and hazardous chemicals.
  • Enhancements led to better monitoring and management of specific environmental products under international treaties.

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Description

Explore the Tariff Reform Program (TRP) in the Philippines, focusing on its continuous review and restructuring to enhance the tariff system's responsiveness to economic needs. This quiz will delve into the rationale and components of the various TRPs implemented since 1980.

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