Philippines should join TPP

The media and the public may be currently consumed with all the news about the announcements of different vice presidential candidates. While this may have some short term significance, an international event took place last October 5, 2015 that may, in the long term, have a more dramatic effect on the daily lives of all Filipinos.

The Ministers of 12 countries of the group known as the Trans Pacific Partnership (TPP) announced the conclusion of their negotiations. The 12 countries are United States, Japan, Canada, Mexico, Brunei, Singapore, Malaysia, Vietnam, Peru, Chile, Australia, and New Zealand. Together, they comprise 40% of the world’s economy.

The TPP is envisioned to promote economic growth, create jobs, raise living standards, reduce poverty, promote good governance and enhance labor and environmental protections among its member countries.

While the Philippines is not included in the first batch of potential members, Foreign Affairs Secretary Albert del Rosario stated two months ago that the Philippines intends to join the TPP as part of the second batch. The other countries that have expressed interest in joining are South Korea, Taiwan, Colombia and Indonesia.

The Trans Pacific Partnership (TPP) is a trade agreement that seeks to be the equivalent of the European Common Market.

The proposed agreement must now be submitted to the different governments for approval. It has a very detailed, 30-chapter agreement. However, the 12-nation body has issued a summary of the agreement. There are “five defining features that  make the Trans-Pacific Partnership a landmark 21st century agreement .” Those features include:

• Removing trade barriers. The TPP eliminates or reduces tariff and non-tariff barriers across substantially all trade in goods and services and covers the whole spectrum of trade and investments.

• Regional production and supply chains. The TPP facilitates the development of production and supply chains, and seamless trade enhancing efficiency and supporting their goal of creating  jobs, raising living standards, enhancing conservation efforts and cross border integration.

• Addressing new trade issues. The TPP addresses new issues like the development of the digital economy and the role of state owned enterprises in the global economy.

• Inclusive trade development. The TPP seeks to ensure that economies at all levels  of development and businesses of all sizes – including small and medium sized enterprise – can take full advantage of all the benefits of the agreement.

• Platform for regional integration. The TPP is intended as a platform for regional economic integration and designed to include additional economies across the Asia Pacific region.

Among the 30 chapters, a few of them would be of special interest to the Philippines. This would include the following:

On Textiles and Apparel. The TPP parties agree to eliminate tariffs on textiles and apparel, industries which are important contributors to economic growth in several TPP Parties’ markets. Most tariffs will be eliminated immediately, although some will be eliminated over a longer time frame.

The chapter also includes specific rules of origin that require use of yarns and fabrics from the TPP region. The chapter also includes commitments on customs cooperation and enforcement to prevent duty evasion, smuggling and fraud.

The textile and apparel industries in the Philippines are almost non-existent in this country. Membership in the TPP could lead to a revival of these industries and creation of thousands of manufacturing jobs. Why? The major textile and apparel industries in East Asia are in China, Bangladesh, Cambodia and Indonesia. China will not join the TPP. Bangladesh and Cambodia are not in the list of prospective countries.

Cross Border Trade In Services. No TPP country may impose quantitative restrictions on the supply of services or require a legal entity or joint venture. This means no limit on the number of suppliers or number of transactions. No country may require a supplier from another country to establish an office or affiliate to supply a service.

This is good news for the mushrooming number of Filipino engaged in knowledge processing like programming, web designing, accounting and marketing services. This means that even small outfits can directly access customers in other TPP countries like Australia, Japan, Canada or the United States without having to set up an office or looking for a joint venture in those countries.

On Transparency and Anti-Corruption. TPP Members agree to effectively enforce anti corruption laws and regulations. They agree to take steps to discourage gifts to public officials, to facilitate reporting of acts of corruption and to provide for disciplinary and other measures for public officials engaging in acts of corruption.

There are other chapters that would be of special interest to the Philippines. Two of those chapters are on Labor, which promotes internationally recognized labor rights; and Environment which requires TPP members to work together to address environmental challenges like pollution, illegal wildlife trafficking, illegal logging, illegal fishing, and protection of the marine environment.

There are also certain chapters, like Financial Services and Telecommunications, which would require our local companies to become more competitive.

The world will soon be divided into major trading and economic blocs. There is already the European Community led by Germany and France. Russia is trying to recreate the old Soviet Union as a single bloc. The Regional Cooperative Economic Program (RCEP) is seen as a future economic bloc led by China.

The Philippines cannot afford to stay isolated and must eventually choose which economic community it is going to join. It is clear that our nation’s future lies in joining the Trans Pacific Partnership.

Where the Write Things Are’s Class for Kids and Teens

Write Away! Weekend: Flash Fiction Writing with Gabriela Lee on October 24 (1-4pm) at the Canadian American School Alphaland Makati Place. Ms. Lee is a writer who teaches at UP Diliman. For registration and fee details contact 0917-6240196 / [email protected].

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