Trump welcomes PH bid for FTA with the US

US President Donald Trump yesterday welcomed the proposal for a free trade agreement (FTA) with the Philippines, one of its long-time allies.

Trade and Industry Secretary Ramon M. Lopez reported that during the Philippines-US bilateral meeting Monday, President Trump expressed willingness to the Philippines to move its bilateral trade cooperation towards a more sustained trade agreement via an FTA. The US President is in the country to attend the ASEAN Leaders' Summit and Related Meetings in Manila, including meeting with Dialogue partners such as the US.

“Pres. Trump welcomed the suggestion and said they will consider exploratory talks on FTA,” said Lopez.

According to Lopez, the Philippines had the chance to raise to the American President and the US delegation the government’s wish to elevate the trade arrangements to start exploring the FTA with the US.

During bilateral meeting, the Philippines cited the growing trade between the two countries where the latter enjoy a little trade surplus, largely due to the country’s eligibility of the US-Generalized System of Preferences (GSP). At least 75 percent of the Philippines total exports to the US are already granted duty-free status or preferential import duty under the US-GSP.

“We acknowledge US support via the Generalized System of Preferences and the recent inclusion of travel goods in the list of eligible products,” Lopez said. The US-GSP grants zero duty on the number of export items to the US market from developing countries. Recently, the Philippines also lobbied for the inclusion of footwear in the USGSP list.

On top of the GSP, the Philippine side also added, “We wish to elevate the trade arrangements to start exploring the FTA with US.”

Over the past decade, two-way trade between the United States and the Philippines has grown by more than 25 percent. In 2016, US exports to the Philippines increased 9 percent to $8.3 billion, with top export categories including electrical machinery, machinery, cereals, aircraft, and soybean flour.

US services exports to the Philippines have increased by more than 60 percent since 2006 and now total $2.5 billion. In 2016, the Philippines was the United States’ 31st largest goods export market.

The stock of US foreign direct investments (FDI) in Philippines was $4.7 billion in 2015 and the stock of Philippines’s FDI in the United States was $1.2 billion in 2015. The United States is the Philippines third largest trading partner after China and Japan.

Earlier, DTI Undersecretary Ceferino S. Rodolfo said that one factor to consider in the FTA exploratory discussion is the policy gap between the two countries, meaning how far it is to align their policies.