The Philippines may not be able to work out a proper Trans-Pacific Partnership (TPP) agreement or forge a trade pact with the European Union in the next two years due to numerous reforms that still have to be carried out to prepare the country for commitments required in such trade deals.
Trade Secretary Gregory Domingo said it usually took around two to three years to hammer out a proper trade agreement amenable to all parties.
But for trade pacts with very stringent commitments, such as those of the TPP and EU, the process could take even longer, depending on the speed of reforms undertaken here and the willingness of the other parties to grant the country some flexibility.
Domingo said that if the country would be able to forge a new trade deal over the near term, the one involving the European Union had a bigger chance of materializing than that with the TPP.
“With the EU, we’re only dealing with one party. With the TPP, we have to talk with all of the parties involved, and it’s by invitation only. The entire process usually takes two to three years. But I think the EU (trade pact) will be forged ahead of the TPP accession,” Domingo said.
Overall trade in goods between the country and the European Union reached 9.1 billion euros (P569 billion) in 2010, a 34-percent improvement from the year before.
As for the TPP, Domingo said the country would want to be granted some flexibility in terms of meeting some of its commitments. But since the Philippines was not in a position to demand anything, reforms would have to be instituted locally to prepare for the trade agreement.
Some of the reforms that need to be implemented are those on labor laws and investment restrictions, Domingo said.
Trade Undersecretary Adrian Cristobal Jr. earlier said that the country’s accession to the TPP would pave the way for around $10 billion worth of exports for the Philippines.