The United Kingdom may explore the possibility of having a bilateral free- trade agreement (FTA) with the Philippines, after the British voted to leave the European Union (EU) last week.
British Ambassador to the Philippines Asif Ahmad said the UK may “readjust” its trade policy, particularly since negotiations for the EU-Philippines FTA have just gotten off the ground this year.
“If you look at every single FTA that the EU has signed since the UK has been a member, we’ve very much signed up to the design of the FTA,” Ahmad said on the sidelines of a news briefing in Taguig City.
“So in many respects, if not in their entirety, the FTAs we have are one that we would ideally like to see translated straight across on a bilateral basis,” he added.
Ahmad said negotiating for bilateral FTAs could give the British government a chance to further improve its trade relations with other countries.
“If the EU-Philippines FTA happens within the time period [before the UK leaves], then that will be in the same boat as with other countries. We have to redefine what the agreement means bilaterally,” he said.
However, the British envoy said establishing bilateral agreements with trading partners come second to forging a “clear” trade agreement between the UK and the EU.
Ahmad made an assurance that, as far as the economic picture is concerned, there will only be some “short-term uncertainties” as financial markets worldwide react to Brexit. But, he said, there are “grounds for confidence” for the Philippines.
The newly independent UK, he said, will not deviate from its stance when it comes to market access and its trade relations with partners, like the Philippines.
“The fact that the majority of companies in the Philippines listed in the Philippine Stock Exchange have significant UK shareholdings or investment portfolios: that will continue, there will be no sudden flight of capital that will come in and out Philippines,” Ahmad added.
Once the British government activates Article 50 of the Lisbon Treaty, which specifies the exit process for members of the economic bloc, it could take the UK two years to exit the EU.
This can only come after the incumbent Prime Minister David Cameron steps down from office in October and a successor is named, a new Cabinet is formed, and the British Parliament approves the referendum result.
Dr. Alvin Ang of the Ateneo Eagle Watch said British investments will likely be unaffected, as there will only be some “rechanneling” of investments to the UK from the EU.
According to the Philippine Statistics Authority, seven of the country’s top investment promotion agencies (IPAs), including the Board of Investments, have approved P4 billion worth of investments from the UK in 2015.
The amount is 1.6 percent of the total approved foreign investment pledges recorded by the seven IPAs in that year.
In the first quarter of 2016, UK investments to the Philippines amounted to P1.8 billion, representing 7.6 percent of total foreign investment pledges during the period.