I spoke to Trade Secretary Greg Domingo yesterday and he told me there is no question the Philippines is “unequivocally joining” the Trans-Pacific Partnership or TPP, echoing the statement he made in Washington last June during a conference at the Center for Strategic and International studies (CSIS) where he said, “I want to state clearly and irrevocably that we want to join the TPP.”
After several years of discussions and more than 30 rounds of negotiations since 2010, the trade deal – which started out as a small push for free trade in 2006 between APEC member countries, namely Singapore, Brunei, Chile and New Zealand, after which the US, Australia and Peru, showed interest in negotiating a free-trade agreement with the four nations – has been finalized and an agreement reached between the 12 “founding countries”: The United States, Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.
Together, these countries make up 40 percent of the global economy, and the “plurilateral” trade agreement augurs well for the future of the Asia Pacific region, as it is also seen to boost trade and commerce between these 12 Pacific rim nations. Analysts agree the TPP will have a major impact on trade and investment in the Asia Pacific region, and among the benefits seen is that it would level the playing field since standard rules will be set on labor, patents and copyrights, and environmental protection, among others, not to mention the possibility of bringing down tariffs on many goods and services down to zero.
According to Greg Domingo, the Philippines is waiting for the protocols in accepting new members to be finalized in the milestone agreement, and that the Philippines is right at the TPP door when it opens again. Aside from the Philippines, other countries that have shown strong interest in joining the TPP include Thailand (which was hobbled by political unrest) and South Korea (whose deputy trade minister stated they would “actively consider joining”). In fact, South Korea already has numerous trade pacts with individual countries or multilateral economic groups – 16 in all – but it is not closing its door on the TPP.
Even China, which tried to compete with the TPP by coming up with the Regional Comprehensive Economic Partnership negotiations, has not been very averse to the idea of joining the Trans-Pacific Partnership. It’s been noticeable how China has been slowly undertaking reforms and opening up its market in areas such as services and investment, access to the Internet and reexamining the role of state-owned enterprises – all of which are necessary for countries that are interested in joining the TPP. After all, the initial 12-member nations have a vast market as they control 40 percent of the global GDP.
It’s unfortunate the Philippines missed out on the opportunity to be among the founding members of this major pact because had it done so in the first place, it would have been inside the TPP door and not waiting outside, hoping for it to open so Johnny-come-latelies would be allowed to enter. As Greg had noted, this would take time. Apparently, the government hesitated because of the restrictive and protectionist provisions in our Constitution which was seen as a hindrance to the negotiating table, since all the member nations have liberalized and open economies. Even Vietnam has seen the light and moved fast to join the negotiations, realizing it stands to gain as the TPP opens up access to the export market with the member-nations. As noted by analysts, Vietnam is going to “gain a proxy free-trade agreement that will open up the important American markets.”
Singapore, on the other hand, saw another opportunity to gain access to other international markets. “With global growth still below pre-financial crisis level, the sealing of the (TPP) agreement will provide a confidence boost to companies and present more opportunities for doing businesses in Asia Pacific,” remarked Singapore Business Federation CEO Ho Meng Kit.
Among those who intensely feel we must join the TPP is business magnate Roberto Ongpin who sees the Philippine economy at its best nowadays, and he believes we must take advantage of opportunities for growth in the global arena. Failure to take advantage of such opportunities will mean we lose out on potential new trade and investment partners, not to mention other existing partners like Japan and the US which naturally will look more favorably towards the other TPP nations. Being excluded from the TPP could spell the possibility of losing out to other Southeast Asian nations – like Vietnam and Malaysia – on existing and potential new markets, as well as new or expanded investments from TPP member countries which include our major trade partners like the US and Japan. Bobby Ongpin strongly believes “we must seize the moment before the moment seizes us.”
Several business groups have been calling for the amendment of the restrictive economic provisions in the 1987 Constitution precisely to open the country to more participation in the global market. Let’s not forget, the Philippines has to be competitive in light of the Asean economic integration and must convince other nations it is an attractive investment destination.
Some are resisting moves to amend the charter, especially on the issue of foreign ownership of land, saying we have to “protect ourselves.” Protect ourselves from what? If one can recall, the Japanese bought the Rockefeller Center and the Pebble Beach Golf Course – two American property icons – which drove fears that “Japan Inc.” was taking over the US. Well, guess what – the golf course is still there and Rockefeller has since been back in the hands of a US-based business tycoon.
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Email: spybits08@gmail.com.