Government urged to join CPTPP to ensure recovery

MANILA, Philippines — By liberalizing certain economic sectors, the Philippines stands to boost its chance of joining a major trans-Pacific trade deal that can significantly aid the country in its much-needed recovery from the pandemic.

In a statement, the Foundation for Economic Freedom (FEF) threw its support for initiatives that will open up the Philippines and make it more competitive in attracting foreign investments.

FEF maintained that doing so would allow the country to take advantage of global opportunities that could help in economic recovery and sustainability.

In particular, FEF said the Philippines should not miss gaining membership in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which is expected to be one of the largest free trade blocs in the world.

The Philippines last March expressed its intention to join CPTPP, a free trade agreement entered into by Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam in December 2018.

It covers market access commitments in trade in goods, services, investments, labor mobility, government procurement, protection of the environment and labor rights, intellectual property and inclusive trade.

A country can join the CPTPP subject to negotiations with the current members and considering certain preconditions.

“Being a member of the CPTPP is a path toward economic recovery. It will greatly benefit our manufacturing sector, particularly the export sector, and open doors for our MSMEs (micro, small, medium enterprises),” FEF said.

“It will allow our business sector to participate in global production networks and maximize trade opportunities,” it said.

However, one of the preconditions to membership in the CPTPP is to not discriminate foreign investors, which can only be done if other sectors of the economy will be opened.

In turn, legislations that make the economy less restrictive to foreign investments, such as the amendments to the Retail Trade Liberalization Act, the Foreign Investment Act and the Public Service Act, are key.

The priority bills were already certified as urgent amid the need to allow economic recovery from COVID-19.

“The amendments to the PSA are being derailed by the insistence of some senators to keep certain public services closed to greater foreign investments like the telecommunications and transportation industry,” FEF said.

“This move will maintain the status quo and thwart the intention of the bill to liberalize the economy,” it said.

In effect, the group maintained that such a move will limit the country’s ability to meet the requirements to join the CPTPP, whose intention is to remove the barriers to free trade among its members.

FEF argued that if the Philippines fails to join the CPTPP, foreign investors would not come to the country as they would not get preferential access to the markets of the trading bloc.

Further, FEF said delaying the necessary reforms to facilitate membership in the CPTPP could result in wasted opportunities and would put the Philippines anew among the laggards in the region.

Other countries that have also shown interest to join the trading bloc include the UK, China, and Taiwan. The US is also expected to rejoin next year.