By Bernie Cahiles-Magkilat
The Philippine government has cited the importance of forging a free trade agreement (FTA) with the US to secure enhanced market access in light of the rise in trade protectionism and escalation of trade war.
“Preserving and securing and enhancing market access to the US is very important,” said Trade and Industry Undersecretary Ceferino S. Rodolfo, the DTI’s chief trade negotiator.
It can come by way of the FTA or some other ways, but Rosolfo said, “What is important is that we are looking closely at it and closely discussing it with the US.”
Rodolfo said this after Reuters reported that US Trade Representative Robert Lighthizer said on Thursday the United States is in the finishing stages of completing a deal to update NAFTA and plans to pursue free trade agreements in sub-Saharan Africa, Southeast Asia and possibly with the Philippines.
Lighthizer, testifying before a US Senate Appropriations subcommittee, said he liked the idea of a trade deal with the Philippines as a “good first agreement” in the region. He said a number of sub-Saharan African countries also would make good candidates for bilateral trade deals.
“We want to have a model agreement. We want to pick someone where there are clear advantages to US manufacturing and agricultural sales and our hope is that most of what is in that model is something we can use with other people,” he said.
Following this report, Rodolfo confirmed of discussion for a possible FTA with the US, the Philippines’ closest ally.
According to Rodolfo, the DTI is still completing the domestic processes towards a decision and talks are ongoing between the two countries and the internal processes of both sides.
“We do not want to preempt the processor nod preempt the result but the intention is to come to a decision whatever will that be on whether to start an FTA negotiations or not,” he said.
Part of the processes is undertaking a study and consultation with local stakeholders.
Amid this ongoing uncertain global environment where there are more protectionist measures being instituted by both the US, China and EU and there is fear in escalation of trade war, Rodolfo reiterated.
“I think it is imperative for us to discuss and to ensure that our exporters will continue to have good access to key markets and that include also the US.”
By securing and enhancing market access to key markets, he said the Philippines will be in a better place than other countries in the coming trade war.
He, however, said that in the long run any trade war will result in a global slowdown that will affect everyone negatively.
But in the short to middle term, he said, there are gains to be made if your country has that access to key markets.
“We want to be ready with our market access,” he said.
He noted that some of the country’s products that go to other countries as part of the value chain end up in the US.
He explained that while a bilateral FTA with the EU is also important, Rodolfo emphasized that the Philippines still enjoy the EU GSP Plus, which is more preferential than the US GSP.
There are still key Philippine exports to the US that are not entitled to zero tariff under the US GSP program.
Thus, the Philippines view the US as more crucial in terms of enhancing market access.