In spite of the geopolitical tensions and trade conflicts that Washington is facing, the Philippines will keep on pushing for a free-trade agreement (FTA) with the United States as part of the country’s goal of expanding market options for exporters.
Trade Secretary Ramon M. Lopez said on Thursday the government will pursue the trade deal with the US this year in spite of the geopolitical and trade issues it is currently engaged in. He explained that economic partnerships that benefit people should be treated separately.
“Yes,” Lopez replied when asked if the proposed FTA with the US will push through, adding that a “trade deal that will be mutually beneficial should be pursued and treated separately.”
The US is trying to strike a deal with China to end their trade conflict that dates back to 2018 when Washington increased duties on washing machines and solar panels and, subsequently, on steel and aluminum. In 2018 the country slapped a 25-percent tariff on $250 billion worth of Chinese imports.
The US was also engaged in a military standoff with Iran before President Donald J. Trump on Wednesday backed away from further escalation.
On January 3, Trump authorized an airstrike that killed Major Gen. Qassem Soleimani, head of the Iranian Revolutionary Guards, at Baghdad’s Airport. Iran retaliated by launching ballistic missiles at two Iraqi military bases housing American soldiers, which Tehran claimed to be the conclusion of their countermeasures.
“Iran appears to be standing down, which is a good thing for all parties concerned and a very good thing for the world,” Trump said.
Philippine Exporters Confederation Inc. (Philexport) President Sergio R. Ortiz-Luis Jr. said this might be the best time to iron out a trade deal with Washington—at a period it is overwhelmed with issues. The US, as a consequence of the geopolitical and trade conflicts hounding it, will be forced to strengthen its political and economic ties with its remaining allies here in Asia.
As the US is pushed over the edge, Ortiz-Luis said the Philippines can bring out its demands at the negotiating table and might compel its long-standing trading partner to concur.
“Free-trade agreements, I don’t see any downside in it. As a matter of fact, it might be easier now to do it, considering that they are also beleaguered by China’s offensive [and] they might be willing to [make some compromises],” Ortiz-Luis told the BusinessMirror.
“We are practically their last bastion in this end of the world,” he argued. “If they are able to come up, it might be cheaper for us to be able to enter. I think we should pursue it.”
First, the time table
American Chamber of Commerce of the Philippines (AmCham) Senior Advisor John D. Forbes called on the Philippine and US governments to begin negotiations this year. First things first, however, he said: they should agree on the time table of the FTA talks.
“In our view, the two governments must agree on the timing for negotiations as dictated by the state of bilateral relations. AmCham has always supported having a bilateral or plurilateral FTA, including our two countries. We would be pleased if some talks could occur in 2020,” Forbes told the BusinessMirror.
Two-way trade between the Philippines and the US in 2018 rose 7.16 percent to $18.69 billion, from $17.44 billion in 2017, according to the Philippine Statistics Authority. The PSA data also showed exports to the US jumped over 10 percent to $10.63 billion, from $9.66 billion, making Washington the country’s largest export destination to beat Japan, Hong Kong, China and Singapore.
The Philippines is enjoying preferential treatment from the US under the Generalized System of Preferences (GSP), allowing it to ship a total of 5,057 products, or nearly half of the 10,600 US tariff lines, to Washington at zero or minimal tariff.
However, Manila could soon lose this duty-free trading once it is classified as an upper middle economy by the World Bank. The government is targeting to transform the Philippines into an upper middle economy by 2022 under President Duterte’s development plan; therefore, the country could squander its GSP status by that year.
Source: https://businessmirror.com.ph/2020/01/10/phl-pushes-trade-deal-with-us-amid-conflicts/