THE business think-tank, Universal Access to Competitiveness and Trade (U-ACT), is calling the government to initiate talks for the negotiations of an RP-EU (Republic of the Philippines-European Union) Free Trade Agreement (FTA).
This given that the Philippines and the EU have concluded their talks for a Partnership Cooperation Agreement (PCA) that serves as a basis for RP-EU cooperation in various fields.
Ambassador Donald G. Dee, U-ACT's chairman, underscored the need to start crafting the Philippines position for the RP-EU FTA in order for the country to take advantage of the opportunities in the EU market and not be crowded out by its neighboring countries, such as Vietnam and Singapore, which have started negotiations for a bilateral trade deal with EU.
"We need to move fast because other countries that have the same market as ours are taking the same route as well. Otherwise, we might be losing a major market," Dee said.
In November 2009, U-ACT, an affiliate of the Philippine Chamber of Commerce and industry, released a study on the "Merits to Philippine Business of Having a Bilateral Philippines-EU FTA," which indicated how beneficial the agreement to Philippine exports.
The study was undertaken in the context of the stalled FTA talks at the Asean (Association of Southeast Asian Nations)-EU level and the latter's pronouncement that they are looking at the option of engaging trade talks with each Asean country instead.
"The Philippines cannot afford to be left behind by its Asean neighbors in securing a FTA with the EU, since this would result to investments diversion and loss of export opportunities," Dee said.
To date, Asean neighbors such as Singapore, Thailand, and Vietnam are moving towards a bilateral FTA with the EU.
The EU is the world's largest economy accounting for 17 percent of world trade in goods, 25 percent of services, and half of global foreign direct investment (FDI).
According to the study, some of the sectors that would likely to benefit from the pact include vegetable, oils and fats, textiles/apparel, motor vehicles parts, other manufactures. Other potential sectors are financial services and insurance, chemical products, communication, construction/dwellings, energy and water supply, paper & publishing, leather, machinery & electrical appliances.
On the other hand, the Philippines' offensive interest to EU are fishery, seafood and marine products (Mindanao tuna), broilers, agricultural products (Mindanao), fresh fruits (bananas), muscovado, processed fruits (mango, pomelo, banana chips), processed or semi-processed coffee products, chemicals (oleochemicals), coco-based products (VCO and beauty by-products, e.g. soap, perfume), natural rubber, biofuel products, mining products, furniture, jewelry, handmade paper, cameras, health and tourism, ICT services, services sector (skilled labor).
The RP-EU study is part of the series of activities that U-ACT has undertaken under the Institutionalization of Multi-Stakeholder Consultation for Trade Policy and Negotiations (I-Must for Trade), a three-year project funded by the Foreign Commonwealth Office through the British Embassy Manila in partnership with the Philippine Chamber of Commerce and Industry (PCCI).