A TRADE relations official assured that President Rodrigo Duterte’s profanity-laced tirade against the European Union will have no effect on the ongoing free trade agreement (FTA) negotiations with the economic bloc.
Bureau of International Trade Relations (BITR) Assistant Secretary Anna Ma. Rosario Robeniol made this clear during the Department of Trade and Industry’s (DTI) consultation with exporters and stakeholders in Cebu City yesterday.
“The EU has confirmed that the December round would push through. It (Duterte’s cussing) didn’t have any effect on our FTA negotiation,” Robeniol said, adding that the same is true for Philippines’ other trading partners like the the United States.
No harm?
The trade official also said Duterte is “just being himself” and that the matter should not be maliciously interpreted, citing the previous case of Duterte’s cursing against the US, to which President Barack Obama described him as a “colorful guy.”
The Philippine Government has ongoing talks with the EU for an FTA since 2013 but the first round of negotiations came about last May. The second round is set this December.
However, Philippine Exporters Confederation of the Philippines (Philexport) Cebu executive director Fred Escalona has expressed concern over Duterte’s recent tirades against the US and the EU for questioning the state of extrajudicial killings in the country.
“I’m just a little bit worried...if the pronouncements will not be explained on the meaning, and how it was said, it could (do) harm, because human rights is one of the requirements of the EU, the traditional markets, and even emerging markets that we try to penetrate,” Escalona said at the sidelines of the consultation.
Trade relations
The EU is the fourth largest trading partner of the Philippines with bilateral trade amounting to P738 billion after Japan, China and the US.
Escalona said that while Duterte’s statements may not immediately have an effect on trade relations with EU, this might delay the ongoing FTA negotiations.
“The Europeans are quite open and flexible on some issues. They can say go ahead, but under this condition. If (conditions are continously violated), we may not be able to do business,” Escalona said.
Under the present setup, the Philippines relies on the EU-Generalized System of Prefererences Plus (GSP+) scheme, which allowes the Philippines to export to EU-member countries 6,209 products at zero duty.
Robeniol said the Philippines needs to seal a bilateral FTA with the EU to lock in the trade relations, emphasizing that the current EU-GSP+ scheme, which was granted to the Philippines in December 2014, is only temporary and is subject to several conditions.
Among other conditions are the implementation of 27 international treaties and conventions on human rights, labor rights, environment and governance.
ASEAN
The scope of the ongoing negotiations cover a broad range of issues including elimination of customs duties and other barriers to trade, services, and investment, access to public procurement markets, as well as additional disciplines in the areas of competition and protection of Intellectual Property Rights, said DTI 7 Assistant Regional Director Nelia Navarro.
Prior to the Philippines’ interest to enter into an FTA with EU, the Association of Southeast Asian Nations (ASEAN) launched the ASEAN-EU FTA negotiation in May 2007. But Robeniel said negotiations were halted after seven rounds to give both sides the opportunity to reflect on an appropriate approach to the negotiations and mutually acceptable levels of ambition for the FTA.
ASEAN failed to secure an FTA with the EU as a regional economic bloc, but member-economies Singapore and Vietnam have secured their FTAs with the EU.
Challenges
Currently, Malaysia and Thailand’s negotiations are paused, while that of Indonesia and the Philippines are ongoing.
Some of the foreseen challenges in sealing an FTA with the European economic bloc is that both the Philippines and EU may push for larger coverage and faster tariff liberalization, which may include products that are traditionally sensitive in their respective domestic markets.
The EU is also expected to push for commitments in the area of foreign ownership.