MANILA: The Philippines and the US have announced that they will start free trade negotiations in November in an effort to bolster bilateral economic ties.
The agreement, if inked, will be the second such US engagement in with an ASEAN-member nation, the first being with Singapore.
A Free Trade Agreement (FTA) with the US will give the Philippines another opportunity to attract investors and become a prominent business hub in the region, said Gamaliel Pascual, a former investment banker and consultant on international business and finance.
However, entering into an FTA will also pose a great challenge for the Philippine Government to show its political will to do things with transparency and accountability.
The Philippines and the US have already resolved issues related to the Trade and Investment Framework Agreement before commencing formal talks, confirmed Philippine Trade Secretary Ramon Lopez.
The move comes amid uncertainty over security ties between the two countries as the administration of President Rodrigo Duterte pursues an independent foreign policy.
“For the Philippines, a free trade agreement with the US would upgrade the current Generalized System of Preferences scheme wherein the US reviews zero-tariff privileges given to more than 3,000 Philippine products every three years,” an earlier report said.
An FTA will give Philippines a more permanent trading arrangement with the US, according to Lopez.
Lopez said he aims to “push footwear and garments as duty-free goods under the FTA” as Manila looks to revive its garments industry which has suffered greatly since 1995 as a result of the phaseout of the Multi-fiber Arrangement (MFA).
The MFA was an international trade agreement on textiles and clothing that imposed quotas on the amount of clothing and textile exports from developing countries to developed countries. The system guaranteed the Philippines markets for its exports of textiles and garments.
“We used to have that quota with the US, (which) was already removed, so we want to bring back ... the garments industry,” Lopez said.
But for Pascual, as the Philippines enters into a free trade negotiation with the US it should start off by looking at America’s existing bilateral trade agreements with Mexico and Singapore.
He pointed out to Arab News that both agreements explicitly state that anyone who wants to trade with America must conduct themselves according to the US Foreign Corrupt Practices.
Pascual said a US-Philippines FTA will most likely follow the same template as the trade agreements with Mexico and Singapore.
“The expectation is that this is not an ordinary FTA because if you look at the two templates, it’s having the same transparency and accountability as in the US in terms of doing business. That’s the treaty requirement we are looking at here,” Pascual said.
The FTA, he continued, will give the Philippines another chance to become a prominent investment destination as it used to be back in 1950, 1965, and 1971.
“Here’s another chance because the US is again changing its focus. It’s another cycle, the opportunity to attract and be prominent as an investment destination.” But, he stressed, the Philippines Government must be prepared and willing to do things exactly the way they do things in the West.
“So the country has a choice. The US is, you want to say, imposing the Western way of doing business. And in the Western way of doing business (you have to follow) the standards, transparency, (and) accountability when you’re filing for a business permit.”
When completed, that’s already a treaty obligation, Pascual said of the FTA.
“So as I know, when you break a contract you get into a worse position so it’s better not to sign the treaty in the first place (if we do not have the political will),” he continued.
But, he added: “If you show the political will, you can expect direct foreign investments like Singapore. Because up to now Singapore still gets 80 percent of all direct foreign investments into ASEAN ... simply because they follow transparency and accountability.”
If that happens, “then we will do very well as a country,” Pascual added.
Philippines, US to discuss free trade agreement in November
Philippines, US to discuss free trade agreement in November
- The move toward starting talks comes after both sides resolved issues around a trade and investment framework agreement, including those related to e-commerce
- Manila primarily looks to revive its footwear and garment industry as duty-free goods under the FTA
France demands EU-Mercosur trade pact signing be put off
- “France asks that the deadlines be pushed back to continue work on getting the legitimate measures of protection for our European agriculture,” said the statement
PARIS, France: France on Sunday urged the European Union to postpone the deadlines set for signing a free trade agreement with South American bloc Mercosur, rejecting the deal in its current form.
In a statement from Prime Minister Sebastien Lecornu’s office, Paris said the conditions were not in place for EU member states to vote on the agreement.
“France asks that the deadlines be pushed back to continue work on getting the legitimate measures of protection for our European agriculture,” said the statement.
European Commission President Ursula von der Leyen is due in Brazil on Monday for talks to finalize the landmark pact with the Mercosur bloc, which includes Brazil, Argentina, Uruguay, and Paraguay.
But Brussels first has to get the approval of the EU member states over the coming week.
“Given a Mercosur summit is announced for December 20 (Saturday), it is clear in this context that the conditions have not been met for any vote (by states) on authorizing the signing of the agreement,” said the statement from Paris.
Earlier Sunday, in an interview published in the Germany financial daily Handelsblatt, France’s Finance Minister Roland Lescure made France’s objections clear.
“As it stands, the treaty is simply not acceptable,” he said.
Securing robust and effective safeguard clauses was one of the three key conditions France set before giving its blessing to the agreement, he added.
The other key points were requiring the same production standards faced by EU farmers and establishing “import controls.”
“Until we have obtained assurances on these three points, France will not accept the agreement,” said Lescure.
European nations are poised to vote on the trade agreement between Tuesday and Friday, according to EU sources.
The European Parliament votes Tuesday on safeguards to reassure farmers — particularly those in France — who are fiercely opposed to the treaty.
If approved, the EU-Mercosur agreement would create a common market of 722 million people.
It is intended to allow the EU to export more cars, machinery, wine, and other goods, and will also facilitate the entry into the European Union of beef, poultry, sugar, honey, and other products.
Farmers in France and some other European countries say it will create unfair competition due to less stringent standards, which they fear could destabilize already fragile European food sectors.
