PH needs more trade deals with world’s biggest markets

DTI official cites country’s ‘game plan’ for Asean Economic Community

The Philippines needs to negotiate for fair trade agreements (FTA) with the United States and European Union to compete with other Asean countries like Vietnam and Indonesia, said a trade and industry official yesterday.

“We do not have FTA with US and EU,” said Ceferino S. Rodolfo, DTI Assistant Secretary of Industry Development Group. These are two of the biggest markets in the world.

Vietnam in particular has been steadily negotiating trade agreements with large markets. If these countries get their trade agreements, Filipino exporters will be up against larger, more competitive markets when deporting their products to these countries, said Rodolfo during the forum which is part of the Cebu Business Month.

He, however, cited the efforts of the Philippine officials to negotiate for a membership into two fair trade agreement schemes — the Regional Comprehensive Economic Partnership and The Trans Pacific Partnership.

He also encouraged local businessmen and entrepreneurs to take advantage of the opportunities presented with the country’s inclusion in the EU’s GSP+ countries list.

“This is our opportunity to take advantage of the market without much competition from other countries,” he said, citing some other countries have graduated from it and others, like Indonesia and Vietnam, are only in the regular GSP list.

With the coming of the Asean integration, the Philippines trade negotiation agenda would be to work toward the compliance of the commitments brought about by AEC, negotiate more trade agreements and implement existing Asean+1 FTAs.

The Asean economy has great potential, he said, citing Asean as a region which has a GDP income of US$2.3 trillion, total world trade of US $2.4 trillion, and a total intra-Asean trade of US $322 billion.

The Asean is also one of the fastest growing regions in the world, with an average GDP growth rate of 5.4 percent in 2015.

The Philippines, however, has a trade deficit of US $4,307 million, based on the 2012 study.

The main causes for the deficit are oil, petrochemicals and rice, Rodolfo said.

He added that the Philippines is driven by domestic investments.

“We import more than we export,” he said.

PH GAME PLAN

To help the Philippines get a better position as a global player, Rodolfo cited four elements that make up the ‘Philippine Game Plan’ for AEC.

These are for the country to substantially comply with commitments, enhance competitiveness, intensify communications and promote collaboration.

In line with complying commitments, all tariffs except live swine, live chicken, meat of swine, meat of chicken, cassava, and sweet potatoes, maize, rice and sugar have been eliminated since 2010.

The Philippines is also pursuing partnerships with Indonesia and Vietnam so that the three countries can collectively control the direction of the Asean community, given its massive size, Rodolfo said.

The plan also encourages tie-ups between the public and private sectors, including the academe, inter-agency coordination, and collaboration across Philippine regions.

Of the four facets, competitiveness is the most important, with or without the AEC, Rodolfo said.

Currently, several industry development programs are being crafted or implemented, including the PPP- based industry road maps, Comprehensive National Industrial Strategy  and Manufacturing Insurgence Program.

He added that SME development is also highly crucial for the country to enhance its competitiveness.

“MSMEs should be the focus; they should be front and center of the discussion,” he said.

MSMEs comprise around 97 percent of the businesses. The support and services that are given to the 3 percent that is made up of large businesses should also be available to the MSMEs.

“MSMEs should not be a ‘by-the-way’ in regional integration,” he said.