RP preparing for talks with US for FTA starting early next year
Business Mirror | 30 July 2008
RP preparing for talks with US for FTA starting early next year
By : Max V. de Leon
The Philippines is now preparing to engage the United States in negotiations for a bilateral free-trade agreement (FTA), which is seen to increase the country’s gross domestic product (GDP) by 0.1 percent to 0.3 percent by the first quarter of 2009 under its new administration.
“We have to be ready so we will be on board immediately after their new government is in place,” Donald Dee, a government special trade envoy and chairman of the Philippine Chamber of Commerce and Industry, said.
He said negotiations for the RP-US FTA will probably start in the early part of next year.
Dee said an FTA with the US is critical, particularly if the World Trade Organization (WTO) Doha Development Round will continue to evade conclusion.
“Without the WTO, we need this FTA badly,” he said.
Based on a study, Dee said the country’s economy would easily grow by 0.1 percent because of the opening of the US market even if the Philippines would not do anything to enhance the competitiveness of its exports.
With an improved competitiveness, however, Dee said the Philippine GDP could grow by 0.3 percent with the RP-US FTA in place.
The study also said there will be an incremental 0.5-percent increase in the industry sector and 1.1-percent expansion for nonfood manufacturing.
There will also be a 1.9-percent growth in the agriculture sector, and 0.7-percent hike in skilled and unskilled labor.
The country’s potential gains from an FTA with the US include trade expansion, increased economic efficiency and productivity, technological innovation, greater specialization in production, lower cost and increased choice of products, boost in regional income, increased investments, and formation of strategic alliances.
Dee said in previous trips to the US by government and industry representatives, the Philippines has managed to muster congressional support through the creation of the “Friends of the Philippines” in the US Congress.
This, he said, is meant to make the American lawmakers understand the situation and advocacies of the Philippines even before the FTA could reach the US Congress.
“So now we are hoping for continuity, although it would still depend on the policy of the new president,” Dee said.
