Constitutional limits hampering PH's TPP bid | Inquirer Business

Constitutional limits hampering PH’s TPP bid

But DTI says country still wants to join trade deal
By: - Reporter / @amyremoINQ
/ 11:13 PM October 19, 2015

The Philippines’ bid to join the newly-minted Trans Pacific Partnership (TPP) agreement may be hampered by provisions in the Constitution, particularly the restrictions on foreign ownership, the Department of Trade and Industry (DTI) said Monday.

Trade Undersecretary Adrian S. Cristobal Jr. said the Philippines was aware of the possible high level commitments that the United States-led landmark deal will require. He said current limitations in the Constitution may not be in line with the TPP’s thrust.


He said the Philippines remained highly interested in being part of the deal, but there were concerns over the challenging chapters in the TPP. These include provisions on intellectual property rights, government procurement, and investor-state dispute settlement (ISDS), which the country must resolve if and when it enters negotiations with member countries.

Article 7 of the Constitution provides that foreigners are prohibited from owning more than 40 percent of businesses and real properties in the country.


The TPP is a landmark agreement that eliminates or reduces tariffs, lowers the cost of trade, and sets new and high standards for global trade while addressing next-generation issues. It is envisioned to promote economic growth, create jobs, raise living standards, reduce poverty, promote good governance and enhance labor and environmental protections among its member countries.

To pave the way for these, the trade pact suggests lowering barriers in trade in services and removing foreign investment limitations. It also has provisions setting common minimum standards on labor markets and environmental protections as well as international dispute resolution regimes.

Despite these concerns, the Philippines would pursue its membership since ìjoining the TPP will provide more opportunities to further strengthen our foothold in the global market with our local enterprises, workers and consumers benefiting from bigger markets and increased foreign investments,î Cristobal said.

The 12 TPP membersóAustralia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States, and Vietnamóannounced the conclusion of their negotiations earlier this month. These 12 countries have a combined population of 800 million and projected to account for 40 percent of the world’s gross domestic product and 30 percent of world trade.

ìThe Philippines has indicated very clearly that we would like to join the TPP and would want to start discussions for our entry once it opens its doors to new members. Even before the TPP was concluded, the Philippine government had already undertaken technical consultations with six out of the 12 TPP countries, and the talks will continue,î Cristobal said.

From all indications, all 12 TPP members seemed to support the Philippines’ bid, he said.

But, ìwe also asked the TPP members regarding their policy on admitting new members and they said that the agreement has to be concluded first,î he said.


The Philippines had previously conducted technical discussions with the US, Malaysia, New Zealand, Australia, Mexico and Canada and would soon initiate the same with Japan, Peru, Chile, Singapore, Brunei and Vietnam.

Becoming a member of TPP would also likely take time since the terms of the agreement must be ratified by the member-state legislatures.

Other countries that have expressed interest in joining the second batch of TPP members are South Korea, Taiwan, Colombia and Indonesia.

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TAGS: Business, Constitution, Philippines, trans pacific partnership agreement
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