Drastic changes needed for Philippine entry to TPP

The government should be ready to implement drastic changes, possibly even including a Constitutional amendment, if it is really serious in its desire to become a signatory to the Trans-Pacific Partnership (TPP) Agreement.

John Forbes, senior advisor of the American Chamber of Commerce of the Philippines, said the country might not even be invited to join the TPP talks due to its very strict policies, particularly when it comes to the practice of certain professions of foreign nationals in the country.

“I worry that the Philippines may not be able to join the TPP. We can’t enter this without making the necessary changes (in certain policies). I’m a very strong supporter of the Philippines being in the TPP. Vietnam is already there. I’d much rather see the Philippines (become part of that group),” Forbes said in a recent interview.

Forbes said one of the biggest deal-breakers that he saw was the large number of professions that foreigners were banned from practicing here.

Under the Philippines Regular Foreign Investment Negative List, 22 major professions, some with a number of sub-categories under them, could only be practiced by Filipino citizens.

These included 12 types of jobs in the field of engineering, 11 kinds of medical and allied services, including general medicine and dentistry, accountancy, architecture, criminology, chemistry, customs brokerage, environmental planning, forestry, geology, interior design, landscape architecture, law, librarianship, marine deck and marine engine officers, master plumbing, sugar technology, social work, teaching, agriculture and fisheries.

“The 60-40 ownership structure and the numerous restrictions on the practice of certain professions, you’ll have to change that. This can be done by changing the way the Constitution is written or by eliminating items from the negative list,” Forbes said.

He added that the world and the region had evolved significantly over the years, due mainly to the presence of bilateral and regional free trade agreements.

“The Philippines has to learn how to change, too,” Forbes said.

The TPP is seen to be the country’s only chance to have a trade agreement with the United States, the Philippines’ largest bilateral trading partner, as the US is now more inclined to get into multilateral trade agreements instead of bilateral ones.

The original negotiations for the TPP started with only three countries—Chile, New Zealand and Singapore—in 2005. Brunei Darussalam eventually joined the talks and became part of the agreement.

Five additional countries, including Australia, Malaysia, Peru, Vietnam and the US, are now under negotiations to join the group. Japan had also expressed interest to become part of the TPP, increasing the potential gains of the Philippines in joining this agreement.

Japan is among the country’s top trading partners.

The aim of the TPP is to bring all tariffs down to zero by 2015. The coverage of the deal spans trade in goods, trade in services, rules of origin, trade remedies, sanitary and phytosanitary measures, technical barriers, intellectual property, government procurement, and competition policy.

In an earlier interview, Trade Undersecretary Adrian Cristobal Jr. said the country’s accession to the TPP would pave the way for around $10 billion worth of exports for the Philippines.

However, he said it was highly unlikely that the country would be invited to join talks this year, as the current members of the group were now on advanced stages of negotiations.