Philippines aggressively pushing free trade deal with US

Despite Washington’s focus on November’s presidential elections

NEW YORK – The Philippines continues to aggressively push for a bilateral free trade agreement (FTA) with the US, according to the Department of Trade and Industry (DTI).

Manila wants to be the first in line when Washington is ready to return to the negotiating table to discuss traditional FTAs again.

While the FTA may not be a priority of the US this year because of its upcoming presidential elections in November, Trade Undersecretary Ceferino Rodolfo said the Philippines continues to lobby for such an agreement.

“We have not seen the US embark on an FTA during or close to an election year but despite that historical record, we continue to push for it,” Rodolfo said during a press briefing at the Philippine Center New York.

But the Philippines isn’t giving up and remains very hopeful on having an FTA with the US, said Rodolfo.

“It’s just that (with) their political dynamics, it will be difficult (for now),” he said.

Nonetheless, there is strong support for the FTA from American businesses including members of the US Chamber of Commerce, the world’s largest business organization, Rodolfo said.

“Even (among) congressional delegations that have been visiting the Philippines, who are members of Congress and who have been discussing it, there is strong support for the FTA,” he told visiting Filipino journalists who are part of the US State Department’s inaugural Friends, Partners, Allies program for journalists.

Philippine products exported to the US such as garments, electronics and agriculture will significantly benefit from having an FTA with the US.

The Biden administration, however, has recently been more focused on the Indo-Pacific Economic Framework (IPEF) instead of the traditional FTAs.

Just the same, the Philippines is also looking forward to the full implementation of the IPEF, Rodolfo said.

The IPEF, launched in 2022, provides a framework for trade in the Indo-Pacific region, which is a key source of raw materials for US manufacturers as well as a key export market for American-made products.

In April 2023, US Trade Representative Katherine Tai said an FTA between the Philippines and the US was not on the table as the Biden administration deemed the IPEF as more appropriate for the prevailing challenges and opportunities in the trade arena.

Tai said then that simply liberalizing trade made the environment vulnerable even though it made trade easier.

The IPEF aims to address specific trade challenges compared to the traditional FTA, which liberalized trade but had created vulnerabilities in the supply chain.

The program has four pillars namely: connected economy (select trade issues), resilient economy (supply chains), clean economy (clean energy, decarbonization), infrastructure and fair economy (tax, anti-corruption issues).

IPEF has made significant progress since its launch with the entry into force of the supply chains agreement and the conclusion of the clean economy and fair economy agreements.

Aside from the US, other partners under IPEF are Australia, Brunei Darussalam, Fiji, India, Indonesia, Japan, Republic of Korea, Malaysia, New Zealand, Singapore, Thailand, Vietnam and the Philippines.

While waiting for the FTA, Rodolfo said the Philippines is pushing for the renewal of the US Generalized System of Preferences (GSP), the largest and oldest US trade preference program.

The GSP expired in 2020 but Philippine Ambassador to the US Jose Manuel Romualdez said a bill to renew the GSP would likely hurdle US Congress before the end of the year.

Rodolfo said the revival of the US GSP is important for the Philippines given that the US is the country’s top export market, and is an important market across many industries.

Export Market Bureau director Bianca Sykimte said the Philippines’ utilization of the GSP is at 70 percent.