Myanmar is asking the Philippines for zero duty access for the exports of tobacco and cigarette products. Similar requests were also filed by Myanmar to Thailand and Malaysia.

The Tariff Commission will conduct a public hearing today on the Myanmar request along with the review of the expiring zero duty rates on imported cement and wheat.

At present, Tariff Commission official said that tobacco and cigarette products are included under the ASEAN Integration System of Preferences and as such ASEAN slapped tobacco with three percent tariff and cigarette at five percent.

The AISP is a scheme where ASEAN 6 gives unilateral import duty exemption to products of export interests to the CLMV ( Cambodia, Laos, Myanmar, and Vietnam ).

Tobacco and cigarette products falls under ASEAN Harmonized Tariff Nomenclature Codes 2401.10.10 (Virginia type, flue-cured); 2401.10.20 (Virginia type, not flue-cured) and; 2401.20-90 (cigarette).

Under the ASEAN Free Trade Area, ASEAN tariffs must go down to by next year, but the Tariff Commission said that an executive order would still be issued to formalize the zero tariff on a particular product.

At present, the country imports tobacco leaves to blend with the local tobacco manufacturers. Most of the tobacco leaves, however, are sourced locally.

There are only two local cigarette manufacturing operations in the country the Philip Morris Philippine Manufacturing Inc. and Fortune Tobacco Corp. of tobacco magnate Lucio Tan.

The government has also a pending trade dispute with Thailand over the tariff rate it imposed on PMPMI cigarette exports.

There are parallel negotiations both at the bilateral level and with the World Trade Organizations with the Department of Trade and Industry representing PMPMI in the negotiations. The case, however, has dragged on for several years now.

The issue stemmed from Thailand’s imposition of higher tariff on PMPMI’s cigarette exports to its Thailand affiliate.

The imposition of higher tariff is a big issue because its affiliate in Thailand is required to put up a bond for the tariff differential in a bid to protect its own industry.

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