Phl escapes potential trade sanctions from US

The Philippines has escaped a potential imposition of trade sanctions by the United States, while other major Asian economies have been put at risk.

President Donald Trump, under Executive Order 13786, has ordered the US Secretary of Commerce and the United States Trade Representative to come out with an Omnibus Report on Significant Trade Deficits that will identify US foreign trading partners with which it had a significant trade deficit in goods in 2016.

In a notice released by the Office of the Federal Register, the Philippines was not included in the list despite the US having a trade deficit in goods with the country last year. Data from the US Census Bureau showed the US trade deficit with the Philippines in 2016 reached $1.78 billion.

US trading partners on the list are Canada, China, the European Union, India, Indonesia, Japan, Malaysia, Mexico, South Korea, Switzerland, Taiwan, Thai- land, and Vietnam.

The US will assess the major causes of the trade deficit with the identified countries, including differential tariffs, non-tariff barriers, injurious dumping, injurious government subsidization, intellectual property theft, forced technology transfer, denial of worker rights and labor standards, and other factors contributing to the deficit.

The US will also assess whether the trading partner is, “directly or indirectly imposing unequal burdens on, or unfairly discriminating in fact against, the commerce of the United States by law, regulation, or practice and thereby placing the commerce of the United States at an unfair disadvantage.”

“It is good that we are not part of that list. I don’t know what the US will do, probably (impose trade) sanctions,” Trade Undersecretary Ceferino Rodolfo said.

“If US is going to impose certain remedial measures on what could allegedly be unfair measures that these countries are currently implementing, then in a relative sense, we will be more competitive to the US market vis-à-vis these countries,” he added.

Rodolfo said the potential imposition of trade sanctions into these countries may force manufacturing investments wanting to export their products to the US to shift to new locations where no trade sanctions exist such as the Philippines.

“For those countries identified, if ever they will be slapped with trade sanctions companies who are currently investing in them for manufacturing, using it as a base to export to the US, they will transfer. They will go south and that is where they will see us because countries like Malaysia, Indonesia, and Thailand are also candidates for sanctions,” he said.