Manila Bulletin, 21 March 2005
No rush in free-trade deal with US - DTI
RP eyeing other trading partners
By BERNIE CAHILES-MAGKILAT
Trade and Industry Secretary Juan B. Santos said there is no rush in the proposed bilateral free-trade agreement with the US noting the country’s trade with the US is slowly losing steam while gaining markets elsewhere particularly, ASEAN, Japan and Greater China.
Santos said this in light of the pronouncement of US Assistant Trade Representative Barbara Weisel urging the Philippines to sign an FTA with the US saying that a newly completed study by the Hawaii-based East-West Center think tank stated there would be a benefit of 3.1 percent increase in nominal GDP to the Philippines once such a pact is concluded.
But Santos told Weisel during their meeting last week that the trend in the Philippines’ exports have been switching away from the US to Japan and the Greater China area.
"Our reliance with the US as our chief trading partner has lessened," he said adding the country’s exports is moving towards nearby countries.
He noted that the lifting of the garment quotas have enabled local garment manufacturers to shift to high-end clothing, he said.
"While we are happy with them as our trading partner, we are pleased with the trend we are seeing," Santos said.
Statistics showed that US share of the Philippines’ total trade has gone down to 17 percent from 29 percent in 2002. Conversely, Philippines’ trade with ASEAN, Japan, Greater China has been on an uptrend.
In fact, Japan is now the country’s largest market, accounting for 20 percent of total exports.
According to Santos he explained to Weisel that the Philippines is pushing for continuing and even intensifying integration of the ASEAN, the ASEAN-China FTA and most especially with the upcoming signing of the Japan-Philippines Economic Partnership Agreement (JPEPA).
During her visit, Weisel was quoting the East West study that an FTA with the United States, the world’s biggest economy, would allow a partner country to stay globally competitive.
"Countries around the world are liberalizing and it is important that as this decision is considered by the Philippines government, that the importance of maintaining its relative competitiveness not just in the region but globally is carefully considered," she said.
Santos, however, said it is still too premature to say no to the FTA with the U.S. but then he said, in so many words, there is no rush.
Santos even told the American Chamber of Commerce that he has not seen enough initiatives from the private sector pushing for the FTA.
He urged AmCham to identify which sectors shall benefit the most with the FTA.
It could be recalled that the FTA initiative was first raised by the ASEAN-U.S. Business Council but this was not warmly received by the U.S. especially after the Philippine government’s withdrawal of its humanitarian delegation to Iraq to save one Filipino truck driver who was kidnapped by Iraqi insurgents.