Ministry weighs extending customs duties on chocolate, biscuit imports
(Jordan Times) — The Ministry of Trade and Industry will decide within three months whether to end or extend the current customs duties on imported biscuits and chocolate products, a ministry official said on Tuesday.
Under a law to protect domestically-manufactured products from unfair trade which took effect three years ago, importers of these products have since March been required to pay a duty of 300 fils per kilogram of biscuits or chocolate.
Every 200 days, the ministry decides whether it wants to continue to charge importers the customs duty.
According to the ministry's secretary general, Samir Emeish, the move is designed to protect locally manufactured products from unfair competition that could lead to serious harm to domestic manufacturers.
Emeish said on Tuesday that based on thorough studies conducted on imported chocolate and biscuit products, specifically those similar to local products, “there was a dire need to protect such manufacturers because they suffer substantial damage as a result of unjustifiable price differences.”
Imports of biscuits and chocolate to the Kingdom saw a noticeable increase between 1996 and 1999. Chocolate imports from different countries surged by 175 per cent in the thee-year period to reach 1,077 tones in 1999.
Meanwhile, imports of biscuits rose by 300 per cent in the same period, registering 2,000 tones in 1999.
Feeling the heat of competition, 19 major chocolate and biscuit producers have since last year filed complaints with the Trade Ministry, mainly focused on dumping.
Some financially strapped manufacturers have streamlined their production lines, while othersw have had to lay off employees or close their plants.
Mahmoud Tounissy, sales director of the Atta Ali pastry outlet's Shmeisani branch, said the manufacturer had sold off three chocolate and biscuit production lines since 1995.
“We felt the edge of competition, especially [because] the government barred us from importing powdered milk...in large quantities, so as not to cause competition with liquid milk [from local dairy farmers],” he stressed.
He added that over the past years, Atta Ali had cut its employee pool from 500 to 20. Today, he said, the firm had been reduced to a single product: ice cream.
Emeish added that the decision on whether or not to extend the duration of the 300 fils duty, which will expire in late September, hinged on the outcome of an existing technical study.
He said the study would, among other things, analyze the quality and prices of locally produced biscuits and chocolate products.
The ministry official further said that the government was also revising legislation on domestic production to cope with Jordan's WTO membership and commitments, so that the laws would be more transparent and comply with international procedures on unfair competition.
“We supported the government in its decision [to impose the duty], but the local manufacturers did not improve in terms of quality,” said Yasser Hijjeh, general manager of Mecceh Trade Corporation, which imports Turkish Bisa biscuits and Areen chocolate.
“With this kind of quality and standards, how could such products compete in world markets, especially since Jordan joined the WTO,” added Hijjeh, the company's sole local agent.
Deeb Anabtawi, the general manager of the Quqa and Anabtawi Company, which imports confectioneries and biscuits from countries including Greece, Spain, Indonesia, Egypt, Japan and Argentina, said the government's move to impose duties had been an attempt to discourage imports.
“But the measure will only result in customs duty losses...We used to pay JD500,000 in custom duties on imported manufactured goods; but now we have halted imports,” he said.
He went on to say that local producers had been given time to enhance the quality of their goods or reduce their prices, but they had not done anything.
“The local industries cannot compete with imported manufacturers,” he said
By Suha Ma'ayeh
© 2000 Mena Report (www.menareport.com)