The Philippines and the United Kingdom have expressed “mutual enthusiasm” over negotiating for a possible bilateral free trade agreement (FTA), once the Britain’s exit from the European Union has been completed.
“We can’t start on formal talks until we formally leave the EU. But on both sides, there is a lot of enthusiasm and that’s why once we have left the EU, then we can move to have an FTA with the Philippines,” said Richard Graham MP, British Prime Minister’s trade envoy to the Philippines.
But if so-called “Brexit” has been completed prior to the EU-FTA negotiations, the UK will then have the flexibility to start FTA discussions with the Philippines. An advantage to negotiating on a bilateral basis was that it would be easier, Graham said.
“There will be more flexibility for the UK and Philippines. We will just negotiate the agreement between two countries. It will be easier when you’re talking with just one party than having 27 other countries involved. In our case, the UK has a strong services sector and we are a very open country. We are also not sensitive about agriculture produce from the Philippines. And that alone may be advantageous for both sides,” Graham explained.
Although the UK is not one of the country’s biggest trade partners, Trade and Industry Secretary Ramon Lopez said that the country should strive to improve the situation. Having an FTA with UK gives the country an opportunity to build the relationship in a stronger fashion and enhance trade arrangements because of these concessions.
“The biggest fear about Brexit is the fear of the unknown, and businesses in particular don’t like uncertainty. The Brexit opened the question of what happens next, what will relations be like, will there still be access to the single market. But what happened is that we got fairly instant stability because of the immediate change in the government within about 10 days,” Graham explained.
Graham however assured that the differences between UK being part of the EU and not “may not be as great as some people imagined.” The issues being raised now, he added, will be duly worked out over time as the UK has yet to invoke Article 50 to formalize the Brexit and complete the processes related to it.
Graham encouraged local companies, particularly those looking to expand in the UK, to take advantage of the so-called currency discount, which was a result of the perceived uncertainties following the announcement of Brexit.
For now, both sides are looking to further boost trade and investment relations between the UK and the Philippines, which has steadily grown over the past years.
According to Graham, opportunities for increased trade and investment for both countries can be had in key sectors including infrastructure, textiles, consumer goods, aerospace, defense, manufacturing, and even education.
The Philippines is currently negotiating with the EU for a free trade deal. If this will be concluded before the UK leaves the EU, then this will remain valid for the British government and can be a good starting point.
“The difference, compared to an FTA with EU is that there might be different sets of products and services that will be mutually beneficial for the two countries but not for the entire EU,” Lopez said, adding that the Philippines was open to having a bilateral FTA with the UK but this could only happen once the British government had completed the Brexit.
Graham added that the “short term uncertainty has been largely overtaken by the speed of which a new government has been created and that gave markets instant stability.”Amy R. Remo