Further liberalization urged
BusinessWorld, Philippines
By Felipe F. Salvosa II, Research Head
Further liberalization urged
22 January 2013
The United States is pleased with the pace of the Philippines’ growth but would like to see economic expansion sustained in the long term by further liberalization, a visiting US State Department official yesterday said.
Fresh into a new term, the Obama administration would like to see a Pacific trade agreement concluded this year, as well as continued engagement with the Asia-Pacific Economic Cooperation (APEC) forum.
“The US wants to partner with the Philippines to sustain growth and to create the conditions for additional investments and prosperity,” said Atul Keshap, a senior State Department official who serves as the US representative to APEC.
Mr. Keshap, who is in Manila for APEC Business Advisory Council meetings, noted that the Aquino administration’s anti-corruption drive had contributed to strong economic growth, which he described as the “envy of all of Asia”.
“Growth is really impressive. There’s clearly a lot going on, there are construction cranes as far as the eye can see. It’s pretty clear there’s a real opportunity for the Philippines to seize the moment and generate some inclusive growth,” he told BusinessWorld.
The proposed Trans-Pacific Partnership Agreement or TPP is a way to further stimulate growth, but Mr. Keshap emphasized that standards needed to be met.
The Philippines is not in a hurry to join the TPP, however, with President Benigno S. C. Aquino III saying last October that the Philippines should first consider whether the deal would be beneficial.
Mr. Keshap clarified that the TPP was not an exclusive club and that all APEC members were welcome to join. High standards, he pointed out, would mean “high-quality wage growth” and “broad-based, inclusive” prosperity.
“That requires a bit of domestic economic surgery for all of us, it requires some sacrifice by everybody. But if you look at the world today there is no choice but to be more globalized, more interconnected, to really secure for our children and our children’s children a prosperous future in which nations can focus on their comparative advantages,” he said.
The Obama administration’s approach to free trade is a departure from previous practice, as the TPP being pushed by Washington includes protections for labor and the environment as well as innovation and intellectual property. The deal also covers green technology, ensures the free flow of information technology, and provides for “coherent” regulatory and supply chains, Mr. Keshap said.
The 11 countries negotiating the 29-chapter TPP have set an informal deadline at the end of 2013 to conclude the deal. There have been 15 rounds of negotiations so far.
The TPP is the US’ proposal to attain the APEC’s “Bogor Goals” of free and open trade and investment for developing economies by 2020, Mr. Keshap said. But the US welcomes other proposals such as the Regional Comprehensive Economic Partnership, which is centered on the Association of Southeast Asian Nations and East Asian economies.
“We’re not saying it’s the only vehicle for trying to attain the Bogor goals of a free trade area for the Pacific. But it’s our best proposal and our best idea of how you would go about doing it. And we have made it very clear that we would like to have every APEC economy eligible for TPP and deriving benefits from TPP,” Mr. Keshap said.
The US will continue to prioritize APEC considering that its 21 member-economies have 2.7 billion consumers and account for about half of global trade and gross domestic product. Six of the US’ top 10 export markets are in APEC and six million American jobs are tied to trade with APEC members, he said.
“The Philippine has enormous opportunity in working with APEC economies and working with the United States particularly to try to see a long-term period of growth,” he added.
