Why Does Countries Formulated Trade Barriers Through Tariffs?

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1. Why does countries formulated trade barriers through tariffs?

Trade barriers are often criticized for the effect they have on the developing world. Because rich-country
players call most of the shots and set trade policies, goods, such as crops that developing countries are best at
producing, still face high barriers. Trade barriers, such as taxes on food imports or subsidies for farmers in
developed economies, lead to overproduction and dumping on world markets, thus lowering prices and hurting
poor-country farmers. Tariffs also tend to be anti-poor, with low rates for raw commodities and high rates for
labor-intensive processed goods.
There are many business men who are against paying the tariffs are those who have illegal goods or
undergone black market activities.
Economists generally agree that trade barriers are detrimental and decrease overall economic efficiency,
this can be explained by the theory of comparative advantage. In theory, free trade involves the removal of all
such barriers, except perhaps those considered necessary for health or national security. In practice, however,
even those countries promoting free trade heavily subsidize certain industries, such as agriculture and steel.
Companies, farmers, ranchers, and manufacturers increasingly encounter non- tariff trade barriers in the
form of product standards, testing requirements, and other technical requirements as they seek to sell products
and services around the world. As tariff barriers to industrial and agricultural trade have fallen, standards-
related measures of this kind have emerged as a key concern. Governments, market participants, and other
entities can use standards-related measures as an effective and efficient means of achieving legitimate
commercial and policy objectives. But when standards-related measures are outdated, overly burdensome,
discriminatory, or otherwise inappropriate, these measures can reduce competition, stifle innovation, and create
unnecessary technical barriers to trade. These kinds of measures can pose a particular problem for small- and
medium-sized enterprises (SMEs), which often do not have the resources to address these problems on their
own. Significant foreign trade barriers in the form of product standards, technical regulations and testing,
certification, and other procedures are involved in determining whether or not products conform to standards
and technical regulations.
2. What are the steps in product registration?
Product Registration is the process in which, after buying a product, you send information about
yourself and the product to the company that sold it, giving the company marketing information and allowing it
to provide technical support, service, etc. to customers.
STEPS IN PRODUCT REGISTRATION:
1. Valid License to Operate (Food Manufacturer/Exporter/Trader/Importer/Distributor/Wholesaler)
2. Scanned copy of clear and complete loose labels or artwork as applicable, of all packaging sizes, or
equivalents as defined by FDA regulations and Picture of the product in all angles and in different packaging
sizes, and from atleast two different perspective allowing visual recognition of a product as the same with the
one being registered.
For Food Supplement: please include the artworks or blister packs and secondary packaging ie paperbox or
cardboard box.
3. For Trader/Wholesaler/Distributor of Locally Manufactured Food Products (When a product is manufactured
or distributed by an establishment other than the FDA Licensed Manufacturer)
 Scanned copy of any of the following:
Notarized Distribution
Contract agreement with FDA Licensed Food Manufacturer/Repacker
For Importers/Distributors:
 Scanned copy of any of the original documents:
Foreign Agency Agreement
Certificate of Distributorship
Appointment Letter
Proforma Invoice
Memorandum of Agreement from the manufacturer
 AND Scanned copy of any of the following:
Manufacturer’s certificate of registration with GMP compliance
Valid Phytosanitary Certificate/Health Certificate
Valid ISO 22000 Certification
Valid HACCP Certificate issued in the country of origin;
Certificate of free sale (CFS) attested by the recognized regulatory body or Chamber of Commerce/Phil.
Consulate in the country of origin.
4. As applicable, documents to substantiate claims, such as:
 Technical or nutrition health studies or reports
 Market Research studies
 Certificate of analysis, quantitative analysis and computations
 Scientific reports or studies published in peer-reviewed scientific journals
 Certificates or certification to support use of logo/seal on Sangkap Pinoy, Halal, Organic, Kosher and in
compliance with current labelling requirements.
5. Certificate of Analysis reflecting critical parameters to determine compliance to applicable standards and
regulations.
 For medium and high risk products with standards of identity (infant formula, milk supplement, food for
infants and young children, foods for special medical purposes, foods for special dietary use, food
supplements, bottled water, processes meat product etc.) the corresponding CoA for assessment of
compliance to such standard must be uploaded.
 Fortified Food Product covered by R.A. 8176 (iodized salt) and R.A. 8976 (cooking oil, flours and
refined sugar)
6. Additional requirements for FOOD SUPPLEMENT:
o Stability study of the finished product
o Safety Data (e.g. LD50 or toxicity tests as applicable to products with herbs and botanic ingredients not
included in the Official Pharmacopoeias and Generally Recognized as Safe (GRAS) list or other
applicable test procedures or reports to access potential toxicity).
7. Actual representative product sample of FOOD SUPPLEMENT in commercial presentation with labels.
Representative sample must be properly labelled with the respective case numbers, packages accordingly to
protect the contents and submitted to FDA Main Office.
3. What is license to operate and how can a business subject be licensed with LTO?
License to Operate is a grant of permission to undertake a trade or carry out a business activity, subject
to regulation or supervision by the licensing authority. Licenses are granted by state or federal agencies, and
also by private concerns, as when a business authorizes another to use its name as a franchise operator. Licenses
granted by government authority imply professional competence and ability to meet certain standards set by law
or regulation.
Doing business in the Philippines, either as single proprietorship, partnership or corporation, calls for
licenses or permits from government. An investor or businessman needs to obtain a business license in the
locality where he will establish his business, as well as register his business with the Department of Trade and
Industry in case of sole proprietorship, or with the Securities and Exchange Commission in the case of
partnerships and corporations.
The Department of Trade and Industry (DTI) administers the registration of business names.
A business proprietor who wishes to start his/her own business needs to register with the DTI. Business
name registration is compulsory and must be completed before the business starts operating. By registering the
business name with the DTI, the proprietor is assured that no other individual or group may legally use the
business name anywhere in the Philippines.
4. Differentiate A.O No. 64 series 1983, A.O No. Series 1983 and A.O No. 2008 series 1974?
The difference between the two Administrative Order is that A.O No. 64 series 1983 don’t have an
entitled administrative order but through researching for more information about Administrative Orders on
Food Laws, A.O NO. Series of 1983 appeared and it is known as the General Food Law in Malaysia that allows
MOH (Minister of Health) to make further subsidiary regulations. This Act may be cited as the Food Act 1983
and shall apply throughout Malaysia. It is also an Act to protect the public against health hazards and fraud in
the preparation, sale and use of food, and for matters incidental thereto or connected therewith.
On the other hand, A.O NO. 208 Series of 1974 and not A.O NO. 2008 Series of 1974 was entitled
Human Foods; Current Good Manufacturing Practice (Sanitation) in Manufacture Processing, Packaging of
Holding.
The definitions and interpretations of this Administrative Order is contained in section 10 of the Food,
Drug and Cosmetic Act (R.A. 3720) are applicable to such terms when used in this part. The following
definitions shall also apply:
a. "Adequate" means that which is needed to accomplish the intended purpose in keeping with good public
health practice.
b. "Plant" means the building or buildings or parts thereof, used for or in connection with the manufacturing,
processing, and packaging, labelling, or holding of human food.
c. "Sanitize" means adequate treatment of surfaces by a process that is effective in destroying vegetative cells of
pathogenic bacteria and in substantially reducing other micro-organisms. Such treatment shall not adversely
affect the product and shall be safe for the consumer.
 This Administrative Order includes:
 Current good manufacturing practice (sanitation),
 Plant and grounds (e.g. Grounds, Plant construction and design),
 Equipment and Utensils (e.g. (a) suitable for their intended use, (b) so designed and of such material and
workmanship as to be adequately cleanable, and (c) properly maintained),
 Sanitary facilities and controls (e.g. Water supply, Sewage disposal, Plumbing, Toilet facilities, Hand-
washing facilities, Rubbish and offal disposal),
 Sanitary operations (e.g. General Maintenance, Animal and vermin control, Sanitation of equipment and
utensils, Storage and handling of cleaned portable equipment and utensils),
 Processes and controls – All operations in the receiving, inspecting, transporting, packaging,
segregating, preparing, processing, and storing of food shall be conducted in accord with adequate
sanitation principles,
 Personnel – The Plant management shall take all reasonable measures and precautions to assure the
following: Disease control, Cleanliness, Education and training, Supervision.
The purpose of this Administrative Order is to define “evaluation services” to require prior approval of
such services and to require the filing of final management consulting and evaluation service reports by contract
with Office of Organization and Management Systems and Office of Program Evaluation.
5. What is SULONG Program and is it successfully implemented?
SULONG (SME Unified Lending Opportunities for National Growth) Program is a unified lending
program designed to support the National SME Development Plan. Under this program, all participating
Government Financial Institutions shall apply simplified and standardized lending procedures and guidelines to
evaluate loan application of SMEs, loan purpose, fee structures, interest rates, application forms, financial
ratios, and other lending parameters. There are two types of loans that are available for SMEs under this
program:
1. Short term loans payable in one year; and
2. Long term loans payable up to five years.
It is successfully implemented since many individual engaged in borrowing money nowadays, based on
my observations, it is successfully implemented. It can help a lot of people who needs money for their personal
needs or for their business capitals. It is said to be successful when the borrowers enjoyed the money they lent.
6. What are the preferred investment activities of the Investment Priority Plan (IPP) of the Philippines for
the year 2018? Did you find it reasonable?
The Board of Investments’ (BOI) proposed 2017-2019 Investment Priority Plan (IPP) aims to address
the aspirations and current socio-economic needs of Filipinos through the integration of small enterprises into
larger business networks. The IPP is envisioned to concentrate in business activities in cities by expanding
investment opportunities in the countryside to create dispersed employment opportunities in the Philippines
with a theme “Scaling Up and Dispersing Opportunities”.
It is a list of investment activities that will be given financial and nonfinancial incentives throughout
2017-2019. IPP seeks “to promote investments in preferred economic activities and sectors that will have direct
and positive impact on the lives of the Filipinos to attain prosperity for all”.
It welcomes future investments that will:
 Modernize the country’s economy through enhanced incentives package.
 Generate massive levels of decent jobs; and
 Help solve societal issues on employment, housing, transportation, safe and secure travel.
Specifically, the BOI listed the following “preferred” investment activities:
1. All Manufacturing Activities (including Agri-Processing);
2. Agriculture and Fishery;
3. Strategic Services;
4. Healthcare Services (including Drug Rehabilitation Centers);
5. Mass Housing;
6. Infrastructure and Logistics (including Local Government Unit-Public Private Partnership (LGU-
PPPs));
7. Innovation Drivers;
8. Inclusive Business Models; and
9. Environment or Climate Change-Related Projects.
The BOI also cited certain export activities like production and manufacture of export products; service
exports; and activities in support of exporters and special laws that mandate certain activities in the IPP.

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