DTI eyes free trade pact with US to boost export

/ 10:09 AM February 21, 2018

Arakan, North Cotabato women wash Cavendish bananas ready for export as this mountainous town has become a center for agribusiness in Central Mindanao area. With Generalized System of Preferences (GSP) program privileges, the Philippines will be able to export bananas, among others, to the United States without having to pay corresponding tariffs. (PHOTO BY PINOY GONZALES/PDI CONTRIBUTOR)

Department of Trade and Industry (DTI) Secretary Ramon Lopez has expressed hope for the start of formal negotiations for a free trade agreement (FTA) with the United States in one to two years, noting that talks have so far remained “exploratory.”

During the Philippine-US Trade and Investment Forum on Tuesday, Lopez noted the advantages of a bilateral trade deal with the world’s largest economy, which would mean greater market access for both countries.


However, Lopez told reporters at the sidelines of the forum that formal talks would still take some time before they even get launched.

“[It might take] one to two years to really see some great progress [in the FTA],” he said, referring to the timeframe for the start of the formal negotiations.


An FTA is seen to further reinforce bilateral economic ties for the two allies, which had a rather rocky start under the Duterte administration.

“Right now, it’s not yet [an official] discussion. We’re still seeing the incremental benefits,” he said.

Even without an FTA, a huge chunk of Philippine exports already enter the US market duty-free under the US Generalized System of Preferences (GSP) program.

According to DIT Undersecretary Ceferino Rodolfo in a previous interview, 75 percent of Philippine products could already enter the US market duty-free under the GSP program.

In the meantime, pending the FTA, the Philippines is seeking an expansion of the goods covered by the GSP program to include other products such as garments.

US GSP Program mulled to extend until 2020

The GSP initiative, which also offers the same duty-free incentive to other select countries, expired in December 2017.


Normally, the program is being renewed in the US Congress yearly. At times when the program is not renewed in time, Lopez said exporters would just pay additional charges and then refund them once the GSP is back in place.

However, this is expected to change, following a bill in US Congress that opted to extend the trade initiative for another three years. According to its official website, the House of Representatives has already passed the bill while the Senate has received the proposal.

If the FTA pushes through, the start of the formal negotiations would almost coincide with the expiration of the three-year GSP, which is seen to be of an advantage for Philippine products entering the US market.

Lopez said that the proposal to extend the program for a longer period, as opposed to just a year, means “continuity and certainty” for Philippine exporters that do business with US.

The FTA talks and the GSP program happen in parallel with one another, the DTI said.                         /kga

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TAGS: DTI, economy, FTA, gsp, Philippines, Secretary Ramon Lopez, Trade, US
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