Philippines Department of Trade and Industry (DTI) Secretary Alfredo Pascual met on 17 April 2023 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).
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 said.
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 explained.
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 the 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.
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,” Secretary Pascual stressed.
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. It 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. Both Secretary Pascual and Ambassador Tai lauded the progress in the discussions and committed to continue working closely together towards the conclusion of negotiations.
