PH expected to benefit from ‘mega’ free trade deal

CEBU CITY—The Philippines stands to benefit significantly from the proposed Free Trade Area of the Asia Pacific (FTAAP) as it will be the only “mega regional agreement” that will be able to bring together the world’s three biggest economies.”

“FTAAP is potentially a huge and important (agreement). The benefits of FTAAP in theory are huge and the main reason is that it brings together the three mega economies, namely United States, China and Japan and for economies like the Philippines, it may mean big, positive gains as well,” Alan Bollard, executive director of the Apec secretariat, said in a briefing here Saturday.

“For me, the FTAAP is an attempt to bring (the regions) together, and ensure that we have one set of arrangements. The question is how to get there. It would be better than the Trans-Pacific Partnership (TPP) agreement, but that means it could be harder to achieve as well and would have high standards,” Bollard said.

Common questions being threshed out included concerns on membership as to what kind of stepping stones will be required; whether an economy has to be a member of the TPP first before it can be part of FTAAP; or if an economy must be part of the Regional Comprehensive Economic Partnership before acceding to the FTAAP.

“We’re still looking at these things,” Bollard added.

Member economies of the Asia Pacific Economic Cooperation are conducting a strategic study on the possible scope of the FTAAP.

“We agreed to enter a strategic study at the end of last year, and that’s now underway. It’s being done by a committee chaired jointly by the US and China, and the study is now on the way. There will be a draft form to be submitted next year to trade ministers but that will be in Peru. In that study we will know whether we should move this forward or if we need to do more work. But for now, we don’t know that yet. It’s too early,” Bollard added.

The FTAAP is expected to build on the liberalization gains in the region, possibly on the ongoing negotiations for the TPP and RCEP.

RCEP refers to a separate free trade agreement being negotiated among the 10 member states of the Asean and its six trading partners, namely Japan, China, Korea, Australia, New Zealand and India, while the TPP, deemed as the Philippines’ only chance to have bilateral partnership with the United States, is a trade agreement among 12 nations in a bid to lower trade barriers among participating countries and to strengthen patent protection, among others.

In the meantime, Bollard said the Philippines, as host of the Apec meetings this year, has steered the discussions to three main topics: micro, small and medium-sized enterprises (MSMEs); trade in services, and resilient communities.

“The broad approach from Apec is to try and allow MSMEs to access the driving forces of the international economy and to do that by getting access to free trade areas, to appropriate regulation… getting access to finance,” he said. On services, Bollard said Apec was now trying to identify how regulation could be making it harder to trade in services, how policy should be designed for that, what are the best practices, and how to encourage supply chains to develop with services.