Think tank bats for RP-EU free trade agreement

MANILA, Philippines - Business think tank Universal Access to Competitiveness and Trade (U-ACT) called on incoming President Benigno ‘Noynoy’ Aquino III to initiate talks for the negotiation of a Philippine-European Union Free Trade Agreement (FTA) to attract more investors from Europe.

The Philippines and the EU have concluded their talks for a Partnership Cooperation Agreement (PCA) which will serve as a basis for a RP-EU cooperation in various fields. 

U-ACT chairman Donald G. Dee stressed that there is a need to start crafting the Philippines’ position in the free trade agreement in order for the country to take advantage of the opportunities in the EU market and not be crowded out by its neighboring countries, such as Vietnam and Singapore, which have started negotiations for a bilateral trade deal with EU.

“We need to move fast because other countries that have the same market as ours are taking the same route as well. Otherwise, we might be losing a major market,” Dee said.

In November 2009, U-ACT released a study which indicated how beneficial a free trade Agreement to Philippine exports.

The study was undertaken in the context of the stalled FTA talks at the ASEAN-EU level and the latter’s pronouncement that they are looking at the option of engaging trade talks with each ASEAN country instead.

“The Philippines cannot afford to be left behind by its ASEAN neighbors in securing a FTA with the EU, since this would result to investments diversion and loss of export opportunities,” Dee said.

To date, ASEAN neighbors such as Singapore, Thailand, and Vietnam are moving towards a bilateral FTA with the EU.

The EU is the world’s largest economy accounting for 17 percent of world trade in goods, 25 percent in services, and half of global foreign direct investment (FDI).

According to the study, some of the sectors that would likely benefit from the pact include vegetable, oils and fats, textiles/apparel, motor vehicles parts, other manufactures. Other potential sectors are financial services and insurance, chemical products, communication, construction/dwellings, energy and water supply, paper and publishing, leather, machinery and electrical appliances.