Industry sources disclosed over the weekend that instead of aiming for a full FTA, the Philippines will propose a selective FTA for specific industries.
The sources said that a selective FTA may even be more beneficial and workable as already proven by the FTA for the electronics sector.
The Information Technology Agreement (ITA) for the electronics sector is recognized and approved under the World Trade Organization (WTO).
The ITA, industry sources explained, recognizes that the value and supply chain for electronics is global.
Thus, at every stage of the supply chain-from raw materials to intermediate goods and finished products – it makes a lot of business sense to configure the supply chain around the world and not restrict it to certain regions.
Another industry sector which could thus benefit from a selective FTA would be the garments sector, especially since the garments quota regime is ending next year.
The Philippines has been trying to convince the US to work out a full FTA .
Unfortunately, for a full FTA, the US wants certain specific actions from the Philippines which the Philippines may not meet.
According to a US Embassy official, these actions would include dealing with corruption, tightening up on intellectual property rights and human rights.
The Philippines, like most developing countries, do not have the economic and political clout to negotiate favorable trade agreements.