Manila Bulletin | August 16, 2009
US businessmen perceive RP a ‘protectionist’ market
By BERNIE CAHILES-MAGKILAT
WASHINGTON, D.C – American businessmen perceived the Philippines as a "protectionist" that refuses to open up and is therefore losing to Vietnam, which is described to have the right attitude and determination to attract foreign investments, while most of its neighboring countries do nothing but complain.
Murray Hiebert, senior director of the Asia Department of International Division of the US Chamber of Commerce, told visiting Philippine journalists that the meeting with the US Trade Represent and the Philippines last year on TIFA (Trade and Investment Facilitation Agreement) did not accomplish much no matter how harder President Gloria Arroyo pushes bilateral trade to move forward.
"When the USTR tried to have discussion with the Philippines on TIFA (Trade and Investment Facilitation Agreement) not much happened there because there is a perception that the Philippines is a protectionist and not really interested in opening up and that makes it so difficult. The buck stops at the USTR," Hiebert said.
Hiebert even doubted the government’s pending request for a preferential trading arrangement on garments is going to materialize even with the filing of the Save Act bill in the US Congress. He noted that the US government’s priority now is help in the rebuilding of Afghanistan and Pakistan by encouraging them to export more to the US market.
The Philippines has refused to undertake a comprehensive bilateral free trade agreement with the US and instead pushed for a sectoral preferential trading scheme starting out with the garment industry. The US, however, wants a comprehensive bilateral trading agreement.
Comparatively, Hiebert said that Vietnam is now the favorite investment destination in southeast Asia by American firms because of their determination to host foreign investments.
"Vietnam is an upcoming star in ASEAN," he pointed out.
Hiebert noted that at one time, Intel was thinking of Thailand and Indonesia for its investments but decided to go to Vietnam saying Vietnam was more willing to give them what they wanted. Intel also decided to close its Cavite chip manufacturing facility in Cavite.
This has resulted in more American companies looking at Vietnam now, Hiebert said.
"Vietnam is pretty serious and more companies are going to Vietnam despite their serious issues like inefficient infrastructure, corruption, legal and very few good engineers. It is because Vietnam is viewed to have very diligent workforce, low cost and grants tax perk packages. Vietnam is like China plus," he added.
In addition, Hiebert said, "Vietnam creates an environment and makes you feel that you are wanted. We don’t have that feeling with other countries and they have the right attitude. Vietnam listens to investors while its neighbors complain."
On the other hand, the Philippines aside from being perceived as a protectionist, it is not also business-friendly and that manufacturing operations in the country are a lot expensive than Vietnam.
Hiebert’s advice to the Philippines: "Don’t look like you’re opening your markets, don’t look like your closing it also."