PH lags behind Asian countries in world trade: DTI
ABS-CBN News, Philippines
PH lags behind Asian countries in world trade: DTI
By Manuel T. Cayon, BusinessMirror
29 November 2011
CEBU CITY—The Philippine private sector has failed to maximize the preferential terms in trade agreements with developed economies, thus, placing the country in a low position in global trade with respect to its Asian neighbors.
This was underscored by Assistant Secretary Ramon Vicente T. Kabigting of the Department of Trade and Industry on Monday as he pointed out that the Philippines ranks only 52nd in global export and 47th in global import trade, despite giving lower tariffs to preferred trading partners granted Most Favored Nation (MFN) status.
The Philippines has an average of 6.3 percent tariff to MFN trading partners, with a lower 5.7 percent on non-agricultural imports and 9.8 percent on agricultural products.
On the other hand, Thailand has higher tariff of 9.9 percent given to its MFN partners, with agriculture imports slapped with a much higher 22.8 percent tariff, and non-agriculture products at 8 percent yet despite its higher tariff, Thailand is 25th in global trade exports, and 27th in imports.
Vietnam has also a higher 9.8 percent average tariff, imposing 17 percent on agricultural imports and 8.7 percent on non-agricultural products and yet, it is 39th in global export and 35th in global imports
The same with Indonesia, which offers 6.8 percent average tariff but is 27th on global export trade and 29th on global imports.
So with Malaysia with 10.9 percent tariff on agricultural products is 23rd and 29th, respectively in global ranking in exports and imports.
“Our business and private sector were not utilizing to the maximum our preferential terms in these agreements,” said Kabigting.
The Philippines entered into a bilateral agreement with Japan in 2006, called the Japan-Philippines Economic Partnership Agreement (Jpepa), the first free trade pact it had entered with any country.
It has existing trade arrangements with other Asian countries under the Association of Southeast Asian Nations (Asean), which however, was still to mature its Asian Free Trade Area (Afta) agreement in 2015.
The Philippine membership in the Asean would also benefit from the Asean negotiation for free-trade agreements with powerhouse economies of Japan, China, South Korea, Australia, and New Zealand.
The Philippines is also negotiating trade arrangements with the US and the European Community.
Under these trade arrangements preferential terms include the removal of protective quantitative restrictions on goods and services entering one country.
In a presentation, Kabigting said that “from 2006 and 2010, the fastest growing export products were mostly those which benefited from preferential tariffs offered by FTAs.” These were fresh bananas, wood carpentry products, plastic boxes and crates, crude petroleum, safety glasses, containers with plastic sheets, doors and windows with plastic frames.
In the case of the Jpepa, the Philippines absorbed an increase of 56.3 percent in 2009 of foreign direct investments (FDI). This compared with 8.8 percent in the years before the Pjepa. The FDI stabilized at 27.8 percent last year.
Kabigting said however, the government has also its share of the predicament in the underutilization of the FTAs, citing the failure of developing a conducive business environment due to corruption and high rates, including power.
He cited the need to improve customs duties, that have also stymied local business groups from engaging in bigger production venture for export.
He said though, that the review of the Pjepa that would start in December this year, would also give them the opportunity to appeal anew, “to the government side, to improve on their side of the agreement.”
