INTERNATIONAL TRADE AGENDA
The Philippines pursues its trade policy interests at various levels: multilaterally, through the World Trade Organization (WTO); regionally, primarily through the Association of Southeast Asian Nations (ASEAN) and the Asia-Pacific Economic Cooperation (APEC); and bilaterally. The Philippines is a founding member of the World Trade Organization (WTO); has a bilateral economic partnership agreement with Japan; has a free trade agreement with the European Free Trade Association; is part of the ASEAN Free Trade Area (AFTA); and, thru the ASEAN, has Free Trade Agreements (FTAs) with China, Japan, South Korea, Australia and New Zealand, and India.
World Trade Organization (WTO)
The Philippines is a member of the multilateral trading system under the World Trade Organization (WTO), an organization for liberalizing trade, negotiating trade agreements, and settling trade disputes. WTO was established in 1995 and is the successor to the General Agreement on Tariffs and Trade (GATT) established in the wake of the Second World War.
The system was developed through a series of trade negotiations, or rounds, held under GATT. The first rounds dealt mainly with tariff reductions but later negotiations included other areas such as anti-dumping and non-tariff measures. The last round – the 1986-94 Uruguay Round – led to the WTO’s creation. Whereas GATT had mainly dealt with trade in goods, the WTO and its agreements now cover trade in services, and in intellectual property.
The Doha Development Agenda (DDA) was launched at the fourth WTO Ministerial Conference in Doha, Qatar, in November 2001. The agenda adds negotiations and other work on non-agricultural tariffs, trade and environment, WTO rules such as anti-dumping and subsidies, investment, competition policy, trade facilitation, transparency in government procurement, intellectual property, and a range of issues raised by developing countries as difficulties they face in implementing the present WTO agreements.
The Philippines supports the conclusion of the DDA, where its priority interests are: to open market access for agricultural products, to reduce developed-country subsidies to their agricultural sectors, and to secure more effective and practical special safeguards mechanism.
Association of Southeast Asian Nations (ASEAN)
The Association of Southeast Asian Nations (ASEAN) was first formed in 1967 with six member countries: Brunei, Indonesia, Malaysia, Philippines, Singapore and Thailand and was subsequently joined by Cambodia, Laos, Myanmar and Vietnam. ASEAN aims to promote collaboration and cooperation among member states as well as other countries, and accelerate the economic growth, social progress and cultural development in the region, and
promote regional peace and stability. ASEAN’s ten member states has combined population of over 626 million people with an economy value at about $2.4 trillion.
DTI leads the ASEAN economic pillar for the Philippines, with the DTI Secretary as the ASEAN Economic Minister (AEM). The DTI also chairs the Philippine Committee on the ASEAN Economic Community (CAEC), created in 2011 to facilitate inter-agency coordination in the formulation and implementation of policies related to the country’s trade and economic engagements under ASEAN.
Asia-Pacific Economic Cooperation Organization (APEC)
The Asia-Pacific Economic Cooperation Organization (APEC) is a regional cooperative, multilateral economic and trade forum established in 1989 to create greater prosperity in the Asia Pacific Region by promoting a balanced, inclusive, sustainable, innovative and secure growth, and by accelerating regional economic integration.
APEC is composed of 21 of the world's economies such as the United States, China, Japan, Australia, Canada, Mexico, and the Philippines. It comprises more than two-thirds of the world's population, accounts for over 50 percent of global trade, and has a combined gross domestic product (GDP) of $37.7 trillion or 54 percent of the global real GDP. Member economies participate on the basis of open dialogue, have an equal say on relevant issues, and reach decisions on issues by consensus. The forum does not provide binding commitments or obligate member economies since commitments are undertaken on a voluntary basis.
During the Philippines’ hosting of the APEC in 2015, economies pursued initiatives to enhance regional economic integration, foster the participation of micro, small, and medium enterprises, invest in human capital development, and build sustainable and resilient communities. Among the major outcomes of the said forum in 2015 is the Philippine-led Boracay Action Agenda to Globalize MSMEs which calls for specific, concrete and practical interventions that APEC economies can implement to provide MSMEs wider opportunities to integrate into global or regional trade, either through global value chains (GVCs) or as direct exporters of finished goods and services.
European Union’s Generalized Scheme of Preferences Plus (EU GSP+)
The European Union’s Generalized Scheme of Preferences Plus (EU GSP+) is an enhanced tariff scheme that provides preferential access to developing countries to any of the 28 members of EU. In order to avail of the GSP +, an applicant t country must meet two conditions: (1) non-diversification of exports and low proportions of EU imports; and (2) ratification of 27 international conventions on human and labor rights, environment and governance principles and effective implementation of these conventions.
The Philippines, currently the only country in ASEAN to be accepted in the scheme, applied for the scheme last year and was accepted formally into the EU-GSP+ on December 18, 2014. It allows the country to export 6, 274 products to any of the 28 members of EU at zero tariffs. Among the products that may avail of the duty free access include textiles, garments, headwear, footwear, furniture, umbrellas, coconut and marine products, processed fruit, prepared food, animal and vegetable fats and oils, and chemicals.
The Philippines was a former beneficiary of the EU’s GSP where only 2,442 products from the Philippines are exported at zero duty while 3,767 are subject to reduced tariffs.
United States’ General Preferential Scheme (US GSP)
The United States’ General Preferential Scheme (US GSP), which provides duty free access to GSP eligible products from GSP beneficiary countries, was first instituted in 1976. To date, there are a total 122 countries and territories beneficiaries of the US GSP. A total of 3,500 eligible products from all beneficiary countries are duty free.
In 2013, the Philippines was ranked as the 5th largest user of the US GS. Export products under the scheme include measuring and checking instruments, raw cane sugar, telescopic sights for rifles, acyclic monoamines and their derivatives, and insulated electric conductors. The US GSP, which expired in July 2013, was renewed in June 2015 until end-2017. It is currently undergoing it formal review and is viewed to add eligble products in 2016.