As most countries are now experiencing economic downturns, opening the global market through free trade may save the world from challenges and future economic shocks.
Trade and Industry Secretary Alfredo Pascual, during the recently concluded 33rd APEC Summit in Bangkok, Thailand, highlighted the need to improve cooperation among nations to achieve strong recovery and promote sustainable trade and development.
Pascual, in a meeting with trade and foreign ministers from the Asia-Pacific region last 17 November, underlined the need for an open market to ease the flow of trade and investment under a functioning rules-based trading system.
“Respect and observing the rules-based trading system is a prerequisite to a conducive open market and a crucial element in promoting trade and sustainable development,” he said.
Also, he called on ministers to observe the decisions and agreements made at the 12th World Trade Organization Ministerial Meeting held last June 2022 in Geneva, Switzerland, while expressing the Philippines’ commitment to implement the Fisheries Subsidies Agreement and its active engagement in the agriculture negotiations, and the Trade-Related Aspects of Intellectual Property Rights Council waiver, among others.
Likewise, as a contribution to APEC’s aim to build a resilient supply chain, Pascual stressed that the Philippines leads the initiatives to allow safe maritime passage.
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CRYPTOCURRENCY backs free market.[/caption]
Seafarers are key actors in the supply chains and are responsible for the delivery of essential goods and products.
The DTI chief urged economies to implement “sound government policies and cooperative measures” that will provide for the health and safety of essential workers.
At the Philippine-led Policy Roundtable on the Safe Passage of APEC Maritime Crew, APEC members adopted a set of recommendations to ensure their protection.
Maritime workers are vital to the economy, as they comprise 113.9 million workers and account for $388.6 million of the country’s gross domestic product in 2021, as reported by UNCTAD.
On the Philippines’ trade policy agenda, Pascual shared that the innovation-centered strategy of the Philippines aims to attain sustainable and inclusive development.
Championing the cause of MSMEs, the Philippines spearheaded the Boracay Action Agenda that aimed to facilitate MSMEs’ participation in global commerce.
Notably, the advocacy for the integration of MSMEs into the global value chain has been gaining traction.
In addition to the discussions at the World Trade Organization, MSMEs is now one of the emerging topics in free trade agreement negotiations.
Recognizing the important role of APEC, the Trade Chief also highlighted its long history of promoting structural reforms to achieve balanced and sustainable growth.
“By fostering transparency and competition in our markets, we can be more resilient to economic shocks and better poised to achieve macroeconomic stability and productivity,” Pascual added.
Ratify RCEP
Meanwhile, German-Philippine Chamber of Commerce and Industry president Stefan Schmitz has called for the immediate ratification of the Regional Comprehensive Economic Partnership or RCEP for trade groups to be able to cope with the trend towards an open market environment.
“From our perspective, we see a great opportunity for having the Philippines join the RCEP as it opens the country to more opportunities from Europe,” Schmitz said in an interview.
He also commended the previous administration of President Rodrigo Roa Duterte for enacting monumental reforms that made some industries in the Philippines open to foreign investors.
“Especially now that economic liberalization laws are in place (i.e. amendments on Public Service Act, Retail Trade Act, Foreign Investments Act) and while the global decoupling trend is ongoing where more businesses might set up shop in the Philippines,” he told the Daily Tribune.
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TRADE deals spur open, resilient economies.[/caption]
Pascual said that President Ferdinand “Bongbong” Marcos Jr. is convinced that RCEP should be ratified by the Senate, changing his previous stand that the agricultural sector is not yet ready to compete in RCEP.
“There is already a decision made by the President saying RCEP ratification is OK. It was last 4 or 10 October when the Cabinet agreed on a decision to request the concurrence of the Senate. The Executive and the Legislative branches have already had informal talks, which is important, benefitting the country. It will make businesses here to be more competitive by reducing tariff or no tariff at all,” Pascual told reporters last 21 June.
For the Philippine Economic Zone Authority, its OIC-director general Tereso Panga said PEZA, along with the various businesses in the Philippines, are very much looking forward to taking advantage of the Philippines’ accession to RCEP so the country can take advantage of trade and investment opportunities through partnerships between the ASEAN nations plus China, Japan, Australia, New Zealand, and South Korea.
“This is the same for the various free trade agreements which will diversify the country’s exports in terms of products and services and country destinations while enhancing the country’s pull for foreign investments,” Panga told the Daily Tribune.
He added: “The country’s economic prospects are bright and promising as we take advantage of our solid macroeconomic fundamentals reinforced by structural reforms and the FTAs, which enable us to withstand the headwinds of the pandemic and mount a strong recovery. Local trade groups can benefit from increased trade and investments from FTA-member countries if they participate in the local and global value chains that provide support to multinational corporations that set up operations or businesses in the Philippines.”
Through the horizontal integration process, he said local suppliers and subcontractors need to step up to the competition and meet the demands of the FTA markets to be able to take advantage of the business opportunities arising from the government’s accession to FTAs.
GSPs imperative for Phl shops
In a separate interview, British Chamber of Commerce Philippines’ executive director and trustee Chris Nelson said his group, along with other trade groups, cope with an open market environment by supporting trade and investment opportunities to further liberalize the economy such as being staunch supporters of economic passage laws.
“About trade deals, from the United Kingdom perspective, there will be a Developing Countries Trading Scheme (DCTS) in early 2023 – an updated version of the Generalized Scheme of Preferences or GSP. This applies to countries that currently benefit under the UK’s GSP,” he said.
Nelson noted that the UK is in a position unilaterally to offer better preferential tariff rates to developing countries, emphasizing that increasing trade with the UK supports growth and poverty reduction, as it will allow over 80 percent of Philippine export goods and 99 percent of total export goods by value to enter the UK duty-free.
Furthermore, he said the trade deal will ensure that Philippine businesses save around 21 million pounds worth of tariffs yearly from the DCTS.
Furthermore, he said the recent APEC Summit in Bangkok is vital to have an open, dynamic, resilient, and peaceful Asia-Pacific community by 2040.
Priorities of the Bangkok APEC Summit were to make countries open to all opportunities, connected in all dimensions, and balanced in all aspects, to advance long-term robust, innovative, and inclusive economic growth as well as sustainability objectives in the Asia-Pacific region.
“This long-term vision will be the pertinent instrument to help the global economy increase its competitiveness. It also tackles global efforts to achieve the UN 2030 Agenda for Sustainable Development,” he said.
For post-Covid economic recovery, Nelson said APEC is working to have an inclusive, sustainable, and innovation-friendly environment for start-up businesses and MSMEs by fostering initiatives to expand APEC’s work with other groups as well.
“From the British Chamber’s perspective, we support the development of its members’ businesses and social interests – by representing over 300 member companies and individuals, including MSMEs. An example would be the MSME Summit 2022 in August— the British Chamber of Commerce Philippines is one of the signatories of at least 37 business organizations that pledged to help the government, such as harnessing public-private partnerships for MSMEs toward a more robust economy,” he stressed.
“We commit ourselves to the development of programs anchored on the 3Ms — Mentorship, Money, and Market — to realize for our country and the Filipino people the goal of achieving prosperity for all,” he added.
Nelson and his group, as a recognized voice of the British business community in the Philippines, said “the Chamber continues to encourage UK companies to have trade and investments here.” “Moreover, as we are on the road to economic recovery, it is the Chamber’s goal to create more jobs, help MSMEs, and boost economic growth and recovery.”
PEZA’s Panga maintained that APEC will be instrumental in the country’s quest for a more robust socio-economic performance of member economies in the region, which can be achieved with APEC at the forefront in attracting more trade and investments and returning the region into its old role and glory as a growth driver of the global economy.
“Diplomacy and business facilitation always go hand-in-hand so it is vital to support regional cooperation platforms like APEC,” Panga said.
Founded in 1989, APEC’s core value of promoting regional economic integration is still important today for Philippine businesses to flourish in a peaceful and secure environment and governmental relations.
Partnered with various legislations and local reforms, this will also strengthen the capabilities of MSMEs to contribute to the country’s gross domestic product.
“Given the right ecosystem and enabling laws, the Philippine economy could be boosted if economic activities flourish in the ecozones and its linkages in the domestic market. With the creation of more ecozones, PEZA can accelerate the growth of the countryside and mobilize the MSMEs to participate in the ecozone value chain toward more inclusive and sustainable development,” according to Panga.
DTI Strategies
Pascual bring at the DTI’s helm, said his tenure will focus on enticing more investments and continuing the county’s participation in free trade agreements, and as part of the Philippines’ plan to build back better in a post-pandemic world
“An inclusive and sustainable industrial development is imperative to build a more competitive economy. Through science, technology, and innovation and the use of essential digital technologies, industries will be better positioned to transform and face competition in domestic and export markets. STI will define our next era of industrialization,” he said in a recent speech.
“The same wave of technologies will help industries in transitioning toward a rapid and resilient economic recovery. Globally competitive and innovative industries can support inclusive growth and improve environmental sustainability and quality of life for Filipinos,” he added.
Pascual said this is through strategies, namely: embracing Industry 4.0.; developing innovative MSME, as well as entrepreneurial tech startups: integrating trade, investment promotion, and industry development policies;
developing human capital and capacity-building programs to prepare our workforce for the future; promoting regional industrialization through innovation and entrepreneurship; and creating and fostering an enabling economic environment to attract more investments, foreign and domestic.
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