RP not yet ready to enter into FTA with US, says economist

The Philippines is not yet ready to enter into a bilateral Free Trade Agreement (FTA) with the US, Institute for International Economics senior fellow Marcus Noland said yesterday.

In a briefing sponsored by the American Chamber of Commerce of the Philippines, Noland said "the best way for developing countries such as the Philippines to secure a satisfactory trade agreement is by engaging in multilateral trade negotiations rather than through bilateral FTAs."

Noland, also a Fullbright-Sycip distinguished lecturer, disclosed that while the US-ASEAN Business Council may have broached the idea of an FTA with the US, "the US would require certain specific actions."

US Embassy officials said these actions would include dealing with corruption, tightening up on intellectual property rights and human rights.

However, Nolan said the only reason the US may be interested in entering into an FTA with the Philippines is if it involved military and security concerns.

The Philippines, like most developing countries, do not have the economic and political clout to negotiate favorable trade agreements and should instead pursue the multilateral trade approach provided under the World Trade Organization (WTO).

"Although it does not affect the Philippines as much, developing countries which want the removal of agricultural subsidies have a better chance of success if they continue to negotiate through the WTO process," Noland said.

The recent 5th WTO Ministerial Meeting in Cancun, Mexico failed to reach an agreement on new trade and agriculture policies due to moves by a group of countries known as the G22.