Government urged to prepare for AFTA

The Federation of Philippine Industries (FPI) is urging the government to come up with a competitive platform for local industries to prepare them for an eventual free trade agreement (FTA) between the ASEAN and China.

In a letter to Trade and Industry Secretary Manuel Roxas II, FPI chairman Meneleo Carlos suggested that government should draw up an exclusion list of products which can be liberalized once government has undertaken the necessary reforms in critical areas which influence industries’ capacity to compete such as energy costs, interest rates, transport and shipping cost and bureaucratic red tape.

The FPI’s proposed exclusion list consist of 736 tariff lines of locally manufactured products which were earlier also requested for MFN (most favored nation) tariff freeze and products under the Philippine CEPT (common effective preferential tariff) sensitive list.

The FPI also suggested the adoption of the modality proposed by Thailand for the early harvest program. Such modality prescribes a longer time frame for liberalization of products from Jan. 1,2004 to Jan. 1, 2008 instead of a three year schedule from 2004 to 2008.

The group also proposed the establishment of rules of origin for ASEAN-China trade prior to the implementation of the early harvest program.

The Philippines, the FPI suggested, should liberalize its shipping and ports infrastructure to offset the advantages to ASEAN countries adjacent to China stemming from cooperation activities such as the Singapore-Kunming Rail Link, Bangkok-Kunming Highway and the development of Greater Mekong Subregion (GMS).