TPP is good for the Philippines

The Trans Pacific Partnership (TPP) has become a major political issue in the American elections. When Hillary Clinton was Secretary of State, she called TPP the “gold standard for trade agreements.” Now that she is running for the Democratic Party presidential nomination, she has reversed her stand because of political pressure from American labor unions who believe that the agreement will result in the loss of manufacturing jobs in the USA.

In the Philippines, TPP is hardly discussed except in business circles. Even among business leaders, there is still very little appreciation of its beneficial effects on the Philippine economy. For instance, some claim that the contents of the TPP Agreement is a secret. The TPP document has 30 chapters which can be downloaded and read by any interested party. There is also a summary that lists the key features of the agreement.

The Trans Pacific Partnership is envisioned to be similar to the European Common Market. The goal is to eliminate trade barriers especially tariffs and quotas among countries in the Asia Pacific region. The first batch of signatories included Australia, Brunei, Canada Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, United States and Vietnam.

Although the Philippines is not in the first batch, Foreign Affairs Secretary Albert del Rosario stated, two months ago, in a round table discussion, that the Philippines had begun preliminary negotiations to join the second batch of TPP countries. Trade Secretary Gregory Domingo has also said: “I want to state clearly and irrevocably that we [ Philippines] want to join the TPP.”

The first batch of TPP has four ASEAN members – Brunei, Malaysia, Singapore, and Vietnam. In a recent Bloomberg report, it said that the biggest beneficiary of the TPP would be Vietnam because it would have the lowest wage policy compared to the other member-nations. Once the Philippines joins, this nation will certainly be one of the biggest beneficiaries of this new Common Market.

I recently read a warning that joining the TPP might result in the Philippines being flooded with duty free American made products. Obviously, the writer has not fully realized the transformation of the world economy in the last five decades.

It is true that there are certain products like aircraft and heavy machinery that are made in the United States. But the USA has long ceased to be an industrial power. Even iconic American products – Apple, Barbie, Nike – are all produced outside the USA. On the crowded streets of Metro Manila, it is Japanese, Korean and German cars that dominate with only a scattering of American cars. The steel industry is now dominated by China, India and Germany – not the United States.

One of the biggest automotive parts company in the world is Continental Temic, a European company. It has factories in China and two plants in the Philippines. Two of the biggest manufacturers of printers in the world are Japanese – Brother and Epson. Both of them have plants in China and are expanding in the Philippines. In fact, there are reports that Epson expects to have 20,000 workers in its plant sites in the CALABAR region. South Korea is another prospective member. Its two biggest companies are Samsung and Hyundai which has manufacturing and shipbuilding facilities in the Philippines but also in Vietnam and China. These are the types of companies that are expected to expand once the Philippines joins the TPP.

Textiles and apparel are among the product categories that will be duty free. The major textile and apparel countries – China, Bangladesh, Cambodia – are not going to join the TPP. This presents a golden opportunity for the Philippines to revive its textile and apparel industries.

Since China is organizing its own Common Market, the manufacturing hub of the TPP will be Vietnam and, hopefully, the Philippines. However, Indonesia is also expected to join and is also another potential hub. This means that the Philippines cannot afford NOT to join.

The United States is interested in joining because the TPP will open up new markets for its service industries. This will present potential competition for local companies in the financial and professional services. However, this also presents new opportunities for the Philippines.

The principal customers of our Business Process Outsourcing (BPO) industry are American service companies in industries like financial service, accounting, legal, marketing, entertainment, animation and technology. As the American service industries grow, the Philippine BPO industry will also grow and will have preferential status if the Philippine joins the TPP since its major competitors – India and China – are not expected to join.

In agriculture, importation of beef, wheat, corn, and dairy products will be duty free. But there is now the opportunity to export, duty and quota free, our own farm products – banana, pineapple, coconut, mango, durian – to Japan, Australia, Canada, and the United States.

The 12 countries now in the TPP account for 40% of the world economy. The next batch of nations will include, South Korea, Indonesia, Taiwan and the Philippines. The TPP will create the most powerful and wealthiest economic region in the world.

Among Filipino companies, there will be winners and losers. But for the nation as a whole, joining the TPP will mean more jobs, faster economic growth and reduction in poverty.

The Philippines must join the Trans Pacific Partnership – the TPP.

Joker and Women Writers

I want to correct what I wrote in my last column regarding the group of women writers Joker Arroyo had a continuing friendship with which begun during the years of martial law. The group is called the Women Writers in Media Now. These include: Karina Bolasco, Sheila Coronel, Ceres Doyo, Sol Juvida, Maria Pl. Lanot, Jo-An Q. Maglipon, Sylvia Mayuga, Gemma Nemenzo, Neni Sta. Romana Cruz, Paulynn P. Sicam, Rochit Tanedo, Marites Vitug Criselda Yabes.

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

Write Away! Weekend: Flash Fiction Writing with Gabriela Lee on October 24 (1-4 pm) 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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