Philippines should prepare for membership in the Trans-Pacific Partnership (TPP) to allow the country to capture US markets and catch up with trade volumes in the region, outgoing Philippine ambassador to the US, Jose Cuisia Jr., said.
The Philippines, he said, should “pursue our membership in the TPP or Trans-Pacific Partnership” even with the change in administration from Benigno Aquino 3rd to Rodrigo Duterte.
“We’ll focus on TPP. But now of course, we don’t know if this administration will pursue.
The US does not want a single country preference agreements anymore. They prefer the multilateral [trade agreements]like the TPP. So we have to accept that,” Cuisia told reporters after the Makati Business Club event on Friday.
“And I’m hopeful that the secretary of Trade and Industry [Ramon Lopez] and Undersecretary [Ceferino] Rodolfo will pursue the Philippine membership in TPP,” he added.
The TPP is a trade agreement signed formally last February 4 by 12 member economies, which is focused on cutting of tariffs, lowering the cost of trade, as well as reducing restrictions on policy measures or so called non-tariff measures (NTM)—all to encourage free trade between its members.
There are already twelve member economies included in the TPP, including Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, United States, and Vietnam.
Cuisia said the US Congress might likely ratify the TPP in December after the US elections in November, and then eventually include a “second batch” of potential member economies that are aiming to be a part of the trade bloc.
The TPP will be the Philippines’ gateway into having freer access to the markets of US, Chile, Mexico, Peru and Canada.
“If it is ratified, then when will they open up to a second batch? I am saying we should be ready for that, we should prepare ourselves, [so]we can be in the second batch. Because there are also other countries who expressed interest to join like South Korea, Thailand, and possibly Indonesia,” Cuisia said.
“So my position is, if we are not ready, we will fall behind especially against Vietnam and Malaysia because they’re part of the TPP. Our markets will go to them especially in garments, shoes, and fruits like mango, among others,” he added.
Asked what can be done to prepare the country for its TPP membership, the outgoing ambassador listed three steps: Consultations with TPP member countries, improvement of our industries to be competitive, and amendment of the Constitution to allow for “higher foreign ownership in sectors which are limited.”
“Because with that limited foreign ownership, we may not qualify. In other words, because one of the principles of TPP is that, there [should be]a level playing field. And if you have preferential treatments for nationals [like]Filipinos, Malaysians, or whatever, then we may not qualify, so that’s the problem. That’s the biggest challenge,” Cuisia said.
With the Duterte administration being vocal into pushing for the amendment of the 60-40 rule in foreign ownership in the country, Cuisia said this will be a “good opportunity” for the Philippines as it will boost the country’s viability to be included in the second batch of TPP members.
According to a TPP report by World Bank earlier this year, the Philippines may suffer 0.2 percent losses in gross domestic product and 0.5 percent losses in exports only in its first year if the country would not make it into the TPP.
The 12 TPP member countries have a combined population of 800 million and are projected to account for 40 percent of the world’s gross domestic product and 30 percent of global trade.