Q4 RP-EU FTA negotiations seen
Manila Bulletin | April 2, 2012
Q4 RP-EU FTA negotiations seen
By BERNIE CAHILES-MAGKILAT
MANILA, Philippines — Negotiations for the Philippines-EU bilateral free trade agreement could start late this year or early next year when all studies and consultations have been completed said Trade and Industry undersecretary Adrian S. Cristobal Jr.
“Formal negotiations at the earliest can start in the fourth quarter or early next year,” said Cristobal, the country’s chief trade negotiator being the undersecretary for Industry Development and Trade Policy of the DTI.
Cristobal told a press conference that Philippines will try to set up a Philippine-EU bilateral meeting at the sidelines of the ASEAN Summit this week in Phomn Penh, Cambodia. He said the bilateral topics for discussions could include a general view of trade and investment relation and an update on the Partnership and Cooperation Agreement (PCA).
The PCA was already signed by both countries in June last year and is the building block towards bilateral FTA negotiations between the two countries. The Philippines is the second ASEAN country to complete negotiations for the PCA with the EU following the signature of the PCA with Indonesia in November 2009. Negotiations are underway with Vietnam, Thailand and Singapore.
“We have to see if we can start with the scoping exercise after March,” Cristobal said. He said that consultations with domestic stakeholders already started last year and a study by the Philippine Institute of Development Studies was only completed late last year and the findings may be finalized this year.
He said they would call for more in-depth studies and further consultations with Congress both the House and Senate and the private sector.
Cristobal said the Philippine side has sent already letter for the start of the scoping exercise in March and the EU has 45 days to respond based on its own internal procedures. The scoping exercise is an exploratory talk to give both sides a sense of what to discuss during the formal FTA negotiations.
The FTA negotiations could involve several components like environment, competition, trade facilitation, investments, cooperation activities, services, among others.
Earlier, EU Ambassador to the Philippines Guy Ledoux told reporters at the sidelines of the “1ST EU-Philippines Meeting on Energy that EU has long been ready to start with the negotiations after both countries signed the Partnership and Cooperation Agreement in June last year.
“It is up to the Philippine government. We are ready to negotiate anytime,” said Ledoux.
Among ASEAN countries, EU is expected to conclude negotiations with Singapore and Malaysia this year.
The EU had shelved the proposed EU-ASEAN FTA because of the difficulty to come up with a unified regional agreement given the divergence of interests in the 10-member ASEAN countries and instead pursued bilateral FTAs with individual ASEAN members.
He said that the human rights issue the EU has with Myanmar is just one of the range of issues that made the regional FTA not feasible.
The Philippine reservations on the Philippine-EU FTA largely concern on the country’s agricultural sector and the marginalized farming community would be greatly disadvantaged by the highly subsidized EU farm sector.
“Studies have shown that a full liberalization would benefit the industrial sector like consumer goods such as appliances and IT, but the agriculture sector would be adversely affected,” Cristobal said earlier.
“The agriculture would be in a difficult position because our major agricultural exports are the potential loser.”
The country’s agricultural sector is highly inefficient and does not enjoy government subsidy. Farmers are also one the marginalized in the economic social strata in the country.
In contrast, the EU farm sector is known for its efficiency and huge subsidies that it earned the ire of the U.S. and other countries at WTO negotiations.
On investments, however, an FTA deal with EU is an excellent opportunity for tourism, BPO, mining and renewable energy.
“An FTA with EU entails a lot of work for all of us. We have to come up with studies to determine the short term and long term gains. We have to get equal footing in negotiations to realize tangible gains,” he said.
With all these concerns, Cristobal said the FTA with EU may take four to six years to realize.
