The local affiliate of an international business group is urging the government to enlist the country in the Trans-Pacific Partnership, and consider hopping aboard the Pacific Alliance to provide larger market access for local manufacturers.
In a news statement issued on Wednesday, the Asia-Pacific Economic Cooperation Business Advisory Council (Abac) Philippines pressed the government to be aggressive in securing economic partnerships for the country. This includes concluding the Regional Comprehensive Economic Partnership (RCEP), joining the TPP and reaching out to the Pacific Alliance.
The RCEP is currently being negotiated by Asean members, Australia, China, India, Japan, New Zealand and South Korea, who are all targeting to finalize the ambitious trade deal this year.
On the other hand, Manila is not a negotiator of the TPP, now known as the Comprehensive and Progressive Agreement on TPP, which is a trade deal among 11 economies that was formalized this year. It originally included the United States, but since its withdrawal, the TPP is now left to Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam to negotiate.
The Abac Philippines said the government should consider enlisting the country in the TPP, in spite of its reduced economic size with the withdrawal of the US, once the trade deal open its doors to new members. Member Guillermo M. Luz said “these may help us gain preferential access from economies we do not have existing partnerships with, such as Canada, Chile, Mexico and Peru.”
Apart from this, Abac Philippines said the trade deal will also provide the Philippines a level playing field in competing with Malaysia and Vietnam in exporting to TPP economies, such as Australia and Canada.
The group is also urging the government to study the potential opportunities that the country can take advantage of if it reaches out to the Pacific Alliance, composed of Chile, Colombia, Mexico and Peru. The Latin American coalition now has Australia, Canada, New Zealand and Singapore as associate members and Southeast Asian nations Indonesia and Thailand as observer parties.
Economic relations between the Philippines and Latin American economies could be improved by the Pacific Alliance. The bloc accounts for 37 percent of the region’s population, 35 percent of its gross domestic product and half of all exports and imports.
However, Manila’s trade with Pacific Alliance member-countries has been insignificant, accounting for less than 1- percent share in exports and imports. Philippine Ambassador to the World Trade Organization Manuel A.J. Teehankee said “establishing economic ties with our friends from Pacific Alliance may serve as the Philippines’s entry point to the entire Latin American market.”
Abac Philippines Chairman Tomas I. Alcantara said trade ties with Asia-Pacific economies could be improved under the RCEP, TPP and Pacific Alliance. “We enjoin the government to define the Philippine position in these regional agreements, and to work with the private sector in honing our country’s competitive advantage,” he said.
Taking advantage of regional trade deals is one area Abac Philippines wants Asia-Pacific trade ministers to prioritize this year, as well as nontariff measures, local services sector, development of micro, small and medium enterprises and national strategy on digital innovation.