Early FTA talks with US good for RP
Manila Bulletin, 9 July 2005
Early FTA talks with US good for RP
By EDU H. LOPEZ
An American expert on international trade and business practice has underscored the benefits for the Philippines to begin negotiating for a free trade agreement (FTA) with the United States.
"A US-RP FTA will make significant contributions to the economies of both countries," said Thomas G. Travis, managing partner of Sandler, Travis & Rosenberg.
In a business forum, Travis said that there are already seven countries with whom the US has entered an FTA. These are Israel (1985), Canada (1988), North American (1992), Jordan (2001), Chile (2003), Singapore (2003) and Australia (2004).
There are also ongoing negotiations with Dominican Republic-Central America, South African Customs Union, Andean and also Bahrain, Panama, Thailand, UAE and Oman.
Among other Asian countries, the Philippines has a competitive advantage because of its extra ordinary relationship with the Americans.
In terms of population in the US, Filipinos are the second largest among other Asian countries.
Approximately 70 percent of whom migrated from the Philippines and 30 percent are naturally born, in addition to a large number of Filipinos whose stay in the US has not been legalized yet.
In considering an FTA partner, Travis stressed that among the important US considerations include a high-level of political commitment, record of reform like compliance with WTO obligations, economic stability, commitment to trade liberalization and cooperation on foreign policy & security.
To forge an FTA with the US therefore, a potential partner should be vocal about its support to and strength in these areas.
"The Philippines is among the potential FTA partners which the US is looking at despite the fact that the Philippine economy is less than one percent of the US economy and the country has huge fiscal problems that even worsened since 1989."
"All that the Philippines needs to do is to be candid with what it wants to get during the negotiations", he said.
Travis cited as an example the case of Mexico whose negotiators were even emotional in their appeal to save their cotton industry. The US gave in to the request in the end, he said.
But while this may be the case, US trading rules are "the most complicated in the world. But there is always flexibility and exception. Thus, the Philippines should work on detailed rules of origin that distinguish the amount of inputs in a specific product that can qualify in the agreement. The import rules must also be the rules of origin."
The US Trade Promotion Authority (TPA) that governs negotiations and the congressional passage of FTAs puts strong emphasis on timelines.
