Caution on TPP

Interesting that the government took two weeks longer to come to the same conclusions reached in my 19 November 2010 Trade Tripper column:

Conditions mute interest in trade deal

(BusinessWorld, 26 November 2010, by Jessica Hermosa)

Philippine interest in a multiparty trade pact which includes the United States has been tempered by the steep market opening commitments required by current negotiating parties, a Trade official yesterday said.

The process to be included in talks for the Trans Pacific Partnership (TPP) could also be cumbersome.

"The tone is more cautious than before," Ann Claire C. Cabochan, director of the Bureau of International Trade Relations, told reporters in a chance interview.

"We know the commitments now," Ms. Cabochan said, following the Philippines’ participation in the recent Asia Pacific Economic Cooperation summit held in Japan where the nine TPP negotiating countries were in attendance.

The nine are: Brunei, Chile, New Zealand, Singapore, Australia, Malaysia, Peru, the United States and Vietnam.

"It would have been our way of getting to the United States," Ms. Cabochan said.

"But it’s what they call a high quality free trade agreement with so many commitments. We’re constrained by our constitution."

The TPP deal requires members to liberalize local service industries on top of slashing tariffs on goods. The Philippine constitution, however, limits or even outrightly bans foreign participation depending on the industry.

The Philippines will also have to "engage with each of the nine" negotiating countries before it can be allowed to file its formal intent, Ms. Cabochan said.

"They really want your readiness first," she said.

In a related development, Ms. Cabochan said the schedule for the review and renegotiation of the Japan-Philippines Economic Partnership Agreement (JPEPA) could be pinned down when both parties gather for a routine meeting in March.

"[The schedule] is one of the items [on the agenda of] the joint committee meeting in Japan in March," she said.

The entry of Filipino nurses into the East Asian country will be among the issues raised, she said without elaborating.

Issues on trade in goods, meanwhile, have so far been hard to identify as the global economic downturn has made it hard to monitor the true impact of the JPEPA, Ms. Cabochan said.