This was the instruction given by Trade and Industry Secretary Manuel Roxas II to the negotiating panel which met with their Singapore counterparts recently and which resulted in a provisional or draft agreement that Roxas has yet to approve.
According to Ramon Vicente Kabigting, director of the Bureau of International Trade Relations and head of the Philippine negotiating panel, the draft agreement offers a possible compensation arrangement for Singapore.
Although Kabigting refused to give details about the compensation package, newsmen learned that Singapore is seeking some $8.8 billion in compensation.
The Philippines, however, is reportedly willing to negotiate at a significantly smaller amount of around $3.1 billion.
The Philippines, at the same time, is willing to offer an "offsetting" arrangement with Singapore, the details of which would still have to be worked out.
If Singapore accepts the Philippine offer, the draft agreement could be scheduled for signing by mid-July.
However, by June 25, Roxas must indicate whether the draft agreement will be the Philippines’ formal offer to Singapore.
Otherwise, Singapore will then have the right to submit a 30-day notification of its intent to engage in a trade war with the Philippines.
Kabigting is hoping that a trade war will be averted between the Philippines and Singapore.
Singapore is seeking compensation as a result of the Philippines’ decision not to include the petrochemical sector under the preferential tariff coverage of the ASEAN Free Trade Area-Common Effective Preferential Tariff scheme.
Under the APTA-CEPT, ASEAN participants should have brought down their tariffs levels to zero to five percent to allow a free flow of goods within the region, thus creating a preferential trade block.
The Philippines, under an allowed protocol, opted to temporarily exclude its petrochemical sector in a bid to give it a chance to strengthen and be more competitive.
The Philippines is, thus maintaining tariff levels at seven to 15 percent.
Countries which claim to be principal petrochem producers and which would be adversely affected by the retention of a tariff barrier include Thailand, Malaysia and Singapore.