FOLLOWING Asean’s launching of trade negotiations with Canada, the local exporters now want to expand their market access to the North American country in a bid to increase their product shipments as they seek recovery from the pandemic.
In a news statement on Monday, Philippine Ambassador to Canada Rodolfo Robles said that “this is an opportune time indeed to negotiate a trade deal with Canada which is looking for new markets and supply of intermediate goods.”
He said the free trade agreement (FTA) between the economic bloc, which includes the Philippines, and Canada is expected to be “modern and comprehensive.” As such, the trade deal is anticipated to factor in the emerging trade realities, e-commerce, micro, small and medium enterprises (MSMEs) and the value chains.
In November last year, the Asean announced that it will pursue an FTA negotiation with Canada during the 10th Asean Economic Ministers-Canada Consultation. The talks are expected to start this year.
A joint feasibility study in 2018 showed that the Asean economy will benefit from an FTA with Canada, projecting an increase in GDP of $39.4 billion. This growth is supported by tariff liberalization, reduction of non-tariff barriers and enhancements in trade facilitation.
The Philippines, according to the same study, stands to gain a 2.63-percent GDP increase from the trade deal, which is equivalent to $7.4 billion. Robles added that the FTA could also contribute additional $37.9 million to the country’s export.
Meanwhile, Robles also pointed out that while the Philippines will generally benefit from an FTA with Canada, some industries may deal with some drawbacks.
“The real challenge is to identify the sectors and provide them with assistance until they are able to find new business models that will work to their advantage. Trade creates wealth and expands economies through specialization,” he explained.
Senior Trade Commissioner of the Embassy of Canada Guy Boileau, on the other hand, stressed that an FTA will reduce if not eliminate tariffs on certain products exported to Canada. These include coconut oil, articles of leather and appliances, he noted.
Apart from boosting bilateral trade, Boileau said that the FTA will also allow both countries to “share information, share expertise and address irritants before they might even become possible disputes.”
“And we talk about services. Services is a huge area of opportunities, as well as on the investment side,” he added.
Canadian Chamber of Commerce of the Philippines (CanCham) president Julian Payne noted that Canada is looking to import more products, including those of Philippines’ agri-food and electronics exports.
“As the two countries recover from downturns due [to] the pandemic, there will be opportunities for increased Philippines exports to Canada. When a free trade agreement is entered into by the Philippines and also includes Canada, Canada exports will become more competitive with those from other countries already in [the] free trade agreement that covers Canada, such as the Comprehensive Progressive Trans Pacific Partnership [CPTPP],” he said.
CPTPP, signed on March 8, 2018, is a free trade deal involving Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, Peru, New Zealand, Singapore and Vietnam. The Asia-Pacific trade pact was launched by the United States to rival economic giant China, but former President Donald Trump withdrew their position in 2017.
Trade Undersecretary Ceferino Rodolfo earlier confirmed that the Philippines signified its interest to join the CPTPP and wrote to New Zealand, the depository country of the FTA.
Rodolfo also identified five target export products that the Department of Trade and Industry would like to secure in the deal: automotive parts, garments, agricultural commodities, processed agricultural products and plant-based meat alternatives, and electronics.
Meanwhile, Canadian Ambassador to the Philippines Peter MacArthur noted that the Philippines is Canada’s fifth biggest non-FTA trading partner.
Among the primary exports of the country to Canada are auto parts, information and communications technology, appliances and agricultural products, he enumerated.
“Your country has a trade surplus and enjoyed a trade surplus most years with my country that includes services trade,” MacArthur said.
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