Secretary of Trade and Industry Alfredo Pascual with USTR Ambassador Katherine Tai

MANILA CITY – On 17 April 2023, Department of Trade and Industry (DTI) Secretary Fred Pascual met with United States Trade Representative (USTR) Ambassador Katherine Tai to discuss the Philippines’ trade priorities, particularly, in the context of ongoing international engagements.

Trade and economic engagements between the Philippines and the United States are currently facilitated through multiple mechanisms. It includes Trade and Investment Framework Agreement (TIFA), Bilateral Strategic Dialogue (BSD), Indo-Pacific Economic Framework for Prosperity (IPEF), and the Asia-Pacific Economic Cooperation (APEC). While the BSD and TIFA are bilateral platforms for progressing economic relations between the Philippines and the United States, both countries have yet to establish a bilateral Free Trade Agreement (FTA).

“We need to send a clear signal to our trade and investment partners including our stakeholders that our alliance and 3³ is as robust as ever, especially on the economic front,” Secretary Pascual said.

A bilateral FTA with the United States would lead to enhanced access of Philippine products and services to the American market. It will also present increased opportunities for investments and business linkages, and greater economic integration within the Indo-Pacific region.

“With an indication from us that we are willing to explore the possibility of an FTA, we will be able to send a strong signal of our ever-growing alliance to our trade and investment partners,” Secretary Pascual emphasized.

While Ambassador Tai acknowledged the interest of the Philippines in an FTA, she underscored that the current approach of the USTR has shifted to negotiating innovative and win-win trade arrangements such as the IPEF. “Increasingly, we have been able to show that our practice is benefitting our economy, and we are trying to use this forward movement to innovate a non-traditional trade agreement,” she added.

The reauthorization of the United States’ Generalized System of Preferences (GSP) also remains an interest of the Philippines, as it provides its beneficiaries with an avenue for tangible benefits for generating jobs and upskilling our workforce. Secretary Pascual highlighted that the DTI is closely monitoring the developments on the reauthorization of the GSP, especially since the Philippines has consistently been a top beneficiary and a top source of imports for American manufacturers and consumers.

Further, Ambassador Tai expressed her support for the reauthorization of the GSP and shared that the Philippines’ continued fulfillment of the GSP statutes such as respecting workers’ rights and protecting intellectual property are all reflected in its engagement in the IPEF, where discussions on similar commitments are also ongoing.

In addition to a possible FTA and the reauthorization of the GSP, the Philippines is also keen on pursuing deeper cooperation with the United States on critical minerals processing. Citing the recently signed Critical Minerals Agreement (CMA) between the United States and Japan, Secretary Pascual enjoined Ambassador Tai to consider a similar partnership with the Philippines given the potential complementation between both countries. “With the Philippines’ abundance of critical mineral reserves vis-à-vis the United States’ nickel demand for processing into batteries for electric vehicles, it is high time that we seize the opportunities for our countries to work together and address the respective gaps in our supply chains.”

Ambassador Tai noted that one of the key objectives of the framework is to build supply chains that are robust, resilient, and secure.

Further, on bilateral engagement, Ambassador Tai conveyed that the Philippines-United States TIFA will be convened in early 2024. The TIFA is the general platform for expanding bilateral trade and investment flows between the United States and the Philippines and for addressing relevant market access issues and concerns. This TIFA was last convened in July 2017.

The Philippines and the United States are also partner countries under the IPEF and have been actively engaged in the ongoing negotiations, especially in the USTR-led Trade Pillar. Areas under this Pillar include Labor, Environment, Digital Trade, Agriculture, Transparency and Good Regulatory Practices, Services Domestic Regulation, Customs Procedures and Trade Facilitation, Competition Policy, Technical Assistance, Economic Cooperation, and Inclusivity. Hence, both Secretary Pascual and Ambassador Tai lauded the progress in the discussions and committed to continue working closely together towards the conclusion of negotiations.

“As we have conveyed in various relevant engagements, the Philippines continues to view the IPEF as a mechanism not only to expand trade and investments in the Indo-Pacific, but also to reap concrete and tangible benefits through opportunities where complementation in key areas with other partner countries can be pursued,” Secretary Pascual remarked.

Both Secretary Pascual and Ambassador Tai likewise look forward to the upcoming APEC Ministers Responsible for Trade (MRT) meeting in Detroit, Michigan next month. Secretary Pascual expressed support for the overarching priorities of the APEC this year on promoting interconnectedness, innovation, and inclusiveness, as well as the cross-cutting concepts of resiliency and sustainability.

The United States is the Philippines’ 3rd largest trading partner, top export market, and 5th largest import supplier in 2022. In the same year, the United States ranked 5th in terms of approved investments, with notable investment activities in administrative and support services, manufacturing, and real estate.*

Date of release: 24 April 2023