Sources said the Philippines and the US are nearing agreement on a three-and-a-half-year extension starting January 2000.
Under the TRIMS provision, the Philippines is supposed to remove its non-tariff barriers. The agreement also indicates that the country should phase down its local content provision on automotive manufacturing.
Under the local content provision, participants to the Motor Vehicle Development Program (MVDP) must source at least 40 percent of their auto parts from local auto parts maker.
US car companies, have complained that such requirement limits access by American assemblers to the local market.
Government said that it needs an extension in order to give local auto parts makers more time to recover from the 1997 financial crisis.
The Philippines and the US had a heated dispute over the matter and had even threatened to avail of legal remedies.
The sources said the Philippines and the US will sign a bilateral agreement on the matter only after the US concludes several other such agreements with at least seven other countries including Brazil, Romania, India, Argentina and Denmark.