Philippines eyes membership in Trans-Pacific FTA
Philstar Global - 2 May 2025
Philippines eyes membership in Trans-Pacific FTA
The Philippines is aiming to formally submit its application to join the high-standard Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) this year as part of its strategy to diversify trade markets, according to the Department of Trade and Industry.
“In terms of target, (it’s) within the year. We might formally submit our application to accede,” Trade Undersecretary Allan Gepty told reporters.
The development comes amid the United States’ imposition of reciprocal tariffs on trade partners, including the Philippines.
Prior to the April 9 announcement of the 90-day pause on reciprocal tariffs and lowering of the levy to 10 percent for most countries, the US had imposed a 17-percent tariff on goods coming from the Philippines.
Gepty said the Philippines has long been interested in joining the CPTPP, even back when it was still known as the Trans-Pacific Partnership or TPP.
“With the entry of the United Kingdom, it gave us more reason to join CPTPP,” he said, noting that the UK is one of the Philippines’ major trading partners.
In December last year, the UK officially became part of the CPTPP, which sets high standards on trade for members such as Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.
The free trade agreement (FTA) started as the TPP, with the US part of the pact.
While the US under the first term of US President Donald Trump withdrew from the deal in 2017, the other countries continued talks, which eventually led to the signing of the agreement in 2018.
Gepty said the Philippines has been holding meetings with CPTPP members as part of its intent to join the trade pact.
By joining the CPTPP, he said the Philippines would benefit in terms of gaining market access in the trade deal’s member countries.
In addition, the high standards under the CPTPP would also benefit the Philippines in terms of attracting investments.
“For foreign investors who are very particular on certain rules, definitely they would welcome the Philippines’ accession to CPTPP,” Gepty said.
Apart from the CPTPP, the government is holding negotiations for FTAs with other countries.
Gepty said the next round of negotiations for the Philippines’ FTA with the European Union (EU) will be held in Brussels on June 16 to 20.
“Taking into account the whole process, as much as possible, we really want to fast-track the negotiation,” he said.
He said there are many pressure points to fast-track the FTA talks, including the Philippines’ expected graduation from the EU Generalized Scheme of Preferences Plus, which allows beneficiary countries to export 6,274 products to the bloc at zero tariff.
“For us, we don’t want an interruption in the preferential arrangement of our goods in the EU market because if we hit the upper middle-income status and then we maintain that for three consecutive years, we will lose the preferential arrangement,” he said.
Barring major external shocks and assuming a favorable global trade environment, Department of Economy, Planning and Development Secretary Arsenio Balisacan said the country could join the upper middle-income club by next year.
Gepty said President Marcos also wants the FTA with the EU to be implemented within the current administration.
In addition, the government sees the need to fast-track FTA negotiations with the EU as the bloc serves as one of the Philippines’ major trading partners, accounting for around eight to 10 percent of the country’s total trade.
As for the FTA talks with Chile, Gepty said the first round would be taking place around July 21 to 25.
With a joint economic conference set to take place between the Philippines and Canada on June 6, he said the two countries would also be discussing the planned exploratory talks for a possible bilateral FTA.
Trade Secretary Cristina Roque said that while the government would be asking the US to bring down the reciprocal tariff imposed on Philippine goods to zero, it would also be looking for other avenues that exporters can cater to.
With the US accounting for the biggest share or 17 percent of total Philippine merchandise exports last year, Rizal Commercial Banking Corp. chief economist Michael Ricafort said “there is a need to diversify the country’s export market amid various FTAs with other ASEAN (Association of Southeast Asian Nations) or Asian countries.”
He said the Philippines should also diversify its export products beyond electronics, which remain the Philippines’ top exports.
