The Philippines will have competitive advantages by pursuing a free trade agreement with the US if and when the trade war escalates, the Trade Department said Friday.
“In the long run any trade war that will result to a global slowdown will affect everyone negatively. But in the short to middle term, there are gains to be made if your country has that access to key markets. We want to be ready,” said Trade undersecretary Ceferino Rodolfo.
Rodolfo confirmed reports that the Philippines and the US were in discussions for a bilateral trade agreement, although Manila was still unsure if a free trade agreement between the two countries could be forged immediately.
The talks between the US and the Philippines and the negotiating process had started, Rodolfo said.
An ongoing study on the proposed agreement and stakeholder consultations to determine the fine prints are still in progress.
The Philippine Trade Department is currently completing the domestic processes toward a decision despite the question of whether or not an FTA will be launched.
“We do not want to pre-empt… the result but the intention is to come to a decision whatever will that be on whether to start an FTA negotiation or not (amid) this ongoing uncertain global environment where there are more protectionist measures being instituted by both sides and there is fear in escalation of trade war,” Rodolfo said.
He said it was imperative for the Philippines to discuss and ensure that local exporters would continue to have access to key markets, including the US.
“Preserving and securing and enhancing market access to the US is very important. It can come by way of the FTA or some other ways. But what is important is that we are looking closely at it and closely discussing it with the US,” Rodolfo said.
The Philippines still needs to negotiate on some key products that are not yet part of the US Generalized System of Preferences.
The Philippines wants to pursue a an agreement with the US in the same pace as that of the Philippine-European Free Trade Association that culminated within a 14-month frame, Rodolfo said.
The Philippines described the Philippine-EFTA FTA as commercially meaningful between the two parties and wanted to see the same applied in the US bilateral talks.
Rodolfo said the Trade Department had consistently met with stakeholders to pinpoint exactly the Philippines’ interests in the markets of potential partners.
The US and China early this month launched tit-for-tat tariffs on each other’s imports, the opening shots in what Beijing called “the largest trade war in economic history” between the world’s top two economies.
The US pulled the trigger on 25-percent duties on about $34 billion in Chinese machinery, electronics and high-tech equipment, including autos, computer hard drives, and LEDs.
The foreign ministry in Beijing said retaliatory measures “took effect immediately” with state news agency Xinhua confirming they were also 25-percent tariffs on an equal amount of goods.