ASEAN AND THE REST OF THE WORLD

Integration in the global economy

ASEAN Free Trade Area

Integration with Dialogue Partners - China - US - Korea - EU - Japan - Canada - +3 (PROC, Japan, ROK) - Russia - India - Pakistan - Australia and New Zealand The Future: The ASEAN Community - ASEAN Political Community - ASEAN Socio-Cultural Community - ASEAN Economic Community (AEC)
- AEC Blueprint provides 2015 as the date of realization

Free Trade Areas: Timelines

Free flow of Goods 2008 Priority Integration Sectors 2010 CEPT-AFTA ASEAN-China, flexibility to 2012 ASEAN-Korea, flexibility to 2012 for RP and Indonesia 2011 ASEAN-India, 2016 for PH 2013 ASEAN-Australia and New Zealand 2018 (or 10 years after entry into force) ASEAN-Japan

Free Trade Areas: Timelines

Free flow of Services 2010 Healthcare, e-ASEAN, Air Travel, Tourism 2013 Logistics 2015 AFAS for non-Priority Integration Sectors - Progressive liberalization (for all FTAs with dialogue partners) Free flow of Investment 2010 AIA (ASEAN investors) 2020 AIA (non-ASEAN investors) - Being negotiated (for all FTAs with dialogue partners)

The ASEAN-China FTA

China has overtaken Japan as the second largest economy China is a market of 1.3 billion people with rising per capita income Chinas GDP stood at US$ 10.09 trillion in 2010, growing by 10.3% despite global recession

How big is the China market?

3rd largest trading partner of ASEAN, accounting for 11.3% of total ASEAN trade in 2008.

How big is the China market?

3rd largest export destination - with 10.1% of ASEANs total exports going to China
3rd largest import source - with 13.3% of ASEANs import requirements bought from China

As a destination for Philippine exports

China is the Philippines 4rd largest export market

Note: 2010 trade data from UNCTAD/WTO ITC TradeMap

As a source for Philippine imports

China is the Philippines

4th largest import source

Top Philippine Exports to China

(Value in US$ Million)
Products 2010 EXPORTS %Share

TOTAL 1 Electronics 2 Copper cathodes & sections of cathodes 3 Nickel ores and concentrates 4 Other coal 5 Copper ores and concentrates 6 Crude oil, coconut (copra) 7 Polymers of ethylene (in primary form) 8 Parts and accessories of motor vehicles 9 Propene (propylene) 10 Electrical transformers, static converters

5,701.50 3,249.34 219.67 176.46 157.52 115.57 76.08 57.51 41.00 36.34 34.76

100.00 56.99 3.85 3.09 2.76 2.03 1.33 1.01 0.72 0.64 0.61

Top Philippine Imports from China

(Value in US$ Million)

Products

2010 IMPORTS

%Share

1 2 3 4 5 6 7 8 9 10

TOTAL Electronics Parts and accessories for office machines Liquefied petroleum gas (LPG) Urea Ceramic products Diammonium phosphate Fresh apples Copper ores and concentrates Flat-rolled products of iron or non-alloy steel Flat-rolled products of iron or non-alloy steel, coldrolled

4,608.83 1,444.27 300.18 87.44 63.51 41.06 38.72 35.05 32.83 29.04 27.60

100.00 31.34 6.51 1.90 1.38 0.89 0.84 0.76 0.71 0.63 0.60

Source: National Statistics Office

ACFTA Benefits for Philippine Business

1 January 2010: More than 90% of Normal Track (NT) products traded between ASEAN and China already had zero duties Tariffs on almost all NT tariff lines have been eliminated by China and the ASEAN-6 (Brunei Darussalam, Indonesia, Malaysia, the Philippines, Singapore and Thailand) For Cambodia, Laos, Myanmar and Viet Nam, tariff elimination will be completed by 1 January 2015

The ASEAN-China FTA

Tariffs on products deemed sensitive will not be eliminated and will instead have end rates of 5% in 2016. Examples include poultry, cabbage, some plastics, pneumatic tires of rubber, terry toweling and similar woven terry fabrics of cotton, semi-finished products of iron or nonalloy steel, freezers and other appliances

The ASEAN-China FTA

Longer timeframe for tariff elimination on 603 lines in the NT by 2012.

These include orchids, margarine, tomato paste and powder, pebbles, hand-made paper and paper board, flat rolled products of iron and steel, rice cookers and wooden furniture

Substantial MFN and ACFTA tariff differential for top Philippine exports to China

ACFTA Benefits for Philippine Business

Sector
Resource and agro-based products

Sample Products Bananas Crude Coconut (copra) oil Mineral oils and fuels Naphtha, reformate or preparations for preparing spirits Other fuel oils Other coal (e.g., briquettes) Propylene, butylene and butadiene Selenium Lauryl alcohol Industrial fatty alcohols Plastic scrap

MFN Rate 10 9 6 6 5 6 5.5 7 13 6.5

ACFT A Rate 0 0 0 5 0 0 0 0 0 0

Chemicals & Plastics

Substantial MFN and ACFTA tariff differential for top Philippine exports to China

ACFTA Benefits for Philippine Business

Sector Sample Products MFN Rate ACFT A Rate

Tinned iron or steel scrap Copper Copper cathodes Waste and scrap copper Copper foils, backed
Machinery and mechanical appliances Parts of air conditioners Parts of other machinery, plant & equip of heading 84.19 Electrical machinery and equipment Uninterrupted Power Supply (UPS) Parts of ballasts and other inductors Vehicles incl. parts and accessories Other parts / accessories of motor vehicles Other parts and accessories of other vehicles of 87.02 - .04

2
2 1.5 7 10 4 10 8 10 10

0
0 0 0 0 0 0 0 0 0

Auto parts

Machinery

Metals

The ASEAN-Korea FTA

1 January 2010: The AKFTA was realized with more than 90% of Normal Track (NT) products traded between ASEAN and Korea already having zero duties. Korea frontloaded 70% of its tariff lines in the NT upon entry into force of the Agreement in 2007, 95% not later than 01 January 2008 and all NT lines on 01 January 2010. ASEAN reduced tariffs for at least 50% of its NT not later than 01 January 2007, 90% by 01 January 2009 and all tariff lines in the NT by 01 January 2010, with flexibility up to 2012. Additional flexibility was accorded to the Philippines to have longer timeframe for elimination for 10% of its NT in 2012.

How big is the Korea market?

In 2010: 48.5 million consumer base US$ 1,467 billion GDP

US$ 30,200 GDP per capita

US$ 425 billion in total imports from the world

US$ 2.2million RP exports to Korea

Philippines-Korea Trade Relations

In 2010:

Korea is the Philippines: 5th largest trading partner 8th largest export market 6th largest import supplier

Philippine Exports to South Korea

In 2010, exports to South Korea went up by about 22%
Top exports to South Korea were: Electronic integrated circuits Electrical capacitors Crude petroleum oils Automatic data processing machines Optical reader Parts and accessories of computers

Benefits for Philippine Business

The Philippines enjoys duty-free treatment for its top exports to Korea
Sector Sample Products Dessicated coconuts Sweet biscuits Copra / coconut oil-cake and residues Tobacco, not flue cured Blended tobacco Petroleum condensates Marble tiles and slabs Articles of asbestos-cement Xylol (xylenes) Lauryl alcohol Washing and cleaning preparations (Inorganic) Industrial fatty alcohols MFN Rate 30 8 2 20 40 3 8 8 3 5.5 6.5 5 AKFTA Rate 0 0 0 0 0 0 0 0 0 0 0 0

Benefits for Philippine Business

The Philippines enjoys duty-free treatment for its top exports to Korea

Sector

Sample Products Iron or steel nuts Copper cathodes Copper wire Tin alloys Parts for radio broadcast receivers Parts for electric sound or visual signalling apparatus Electrical particle accelerators

MFN Rate 8 3 8 3 8 8 8

AKFTA Rate 0 0 0 0 0 0 0

Philippines-Japan Economic Partnership Agreement (PJEPA)

PJEPA

PJEPA is the Philippines most comprehensive bilateral agreement to date but it is currently being reviewed by government It aims to facilitate and promote free trans-border flow of goods, persons, services and capital between two countries It was ratified by the Philippine government in October 2008

ASEAN-Japan Comprehensive Economic Partnership Agreement (AJCEP

The Agreement was signed in April 2008 It aims to strengthen the economic ties between Japan and the ASEAN, create a larger economies of scale and attract investments It covers the following areas: trade in goods, ROO, SPS, TBT, Trade in Services, Investment, Economic Cooperation and Dispute Settlement

AJCEP

How big is the Japan market

In 2010:

126 million consumer base

US5.46trillion GDP US$ 34,000 per capita GDP US$ 693 billion total merchandise imports from the world. 4th largest importer of goods in the world.

Major Markets of RP Merchandise Exports %

2008 US$ 49.02B
Rest of the World 25%

EU 17%
USA 17%

2010 US$ 51.43B Rest of the World 23% China 11% EU 14% USA 15%

China 11% Japan 16%

ASEAN 22%

ASEAN 14%

2009 US$ 38.33B

Rest of the World 23%

EU 20%

Japan 15%

China 8% ASEAN 15%

USA 18%

Japan 16%

Major Markets of RP Merchandise Imports Major Suppliers of RP Merchandise Exports % %

2008 US$ 49.02B
Rest of the World 25%

EU 17%
USA 17%

2010 US$ 51.43B Rest of the World 23% ASEAN 22%

China 11% Japan 16%

ASEAN 14%

China 11%

2009 US$ 38.33B

Rest of the World 23%

EU 14%
EU 20%

USA 15%

Japan 15%

China 8% ASEAN 15%

USA 18%

Japan 16%

Philippines-Japan Merchandise Trade (Values in US$ Billion)

Year Total Trade Exports to Japan % Share to Total Exports Imports from Japan % Share to Total Imports Balance of Trade

2006 2007

15.19 14.14

7.92 7.30

16.50 14.50

7.27 6.84

13.60 11.94

0.65 0.46

2008
2009

14.28
11.55

7.68
6.20

15.67
16.17

6.60
5.35

11.64
12.45

1.08
0.85

2010

14.57

7.82

15.22

6.75

12.33

1.08

Opening up the Japan market to Philippine exports

PJEPA Benefits for Philippine Business

Tariff Elimination Schedule for Phil. exports
Immediate Elimination ( A- zero duty as of Dec.2008) Gradual (B3 B15)

Tariff lines
7, 476 (80%)

Sample Products
Electronics Garments Furniture Metal manufactures Marine products (e.g. shrimp and prawns) Processed foods Fruits and vegetables Carpets and other textile floor coverings Fresh pineapples Pineapple and tomato juices Ground nuts Certain jewelry items Chemicals Coconut ,papayas, mangoes Minerals Roaster coffee Footwear

888 (9%)

Phased reduction / TRQ/ renegotiation

316 (4%)

Certain Marine products (tuna, marlin and swordish) Raw cane sugar Cane molasses Forest products

The Philippines commenced implementation of an EPA with Japan under the ambit of ASEAN in 01 July 2010

AJCEPA
Essentially the same Philippine tariff commitments as in PJEPA.
Normal Track Normal Track tariff elimination within 10 years upon entry-into-force with flexibility of up till 13 years for Cambodia, Laos and Myanmar. Sensitive Track 0-5% after 10 years from entry-into-force, with a number of lines without any level of tariff reduction (standstill)

Sensitive Track

Longer tariff elimination schedules for some products as compared to the PJEPA. Under the PJEPA tariffs on 127 lines will be eliminated immediately but under the AJCEPA it will take five years.

Opening up the Japan market to Philippine exports

AJCEPA Benefits for Philippine Business

Integrates the Philippines into a regional market with a population of more than 700 million. Manufacturing inputs from other ASEAN countries and Japan are considered originating and may be used to qualify for passing the ROO and getting AJCEP preference. More choices in sourcing imported inputs

Enhanced market access in Japan for Philippine exports PJEPA & AJCEPA Benefits for Philippine Business
Sector
Chemicals & Plastics

MFN Lauryl alcohol Glycerol Other plastic packaging materials Epoxide resins Copper foil, backed with refined copper Copper foil, backed with copper alloys Scrap, powders of other base metals 4.7 5 3.9 3.1 3 3 2.5 / 3

AJCEP A 0 0 0 0 0 0 0

PJEP A 0 0 0 0 0 0 0

Metals

Glass

Other non-wired glass

4.2

PJEPA & AJCEPA Benefits for Philippine Business

Secto r Frozen poultry meat cuts Yellowfin tunas Shrimps and prawns Other smoked fish - Tara Fresh Mangoes Fresh pineapples MFN 3 3.5 1 10 10 3 17 AJCEP A 0 3.5 0 7.3 7.3 0 17 PJEPA 0 1.8 0 6.3 2.5 0 In Quota =0 (1,200 MT in 2010)

Resource and agro-based products

Refined coconut oil Crude coconut (copra) oil

4.5% or 5 yen/kg whichever is greater; 3 3.9

Other plywood and veneered panels Builders' woodwork

0 0

0 0

ASEAN-Australia-New Zealand FTA

AANZFTA is Australias first multi-country (plurilateral) FTA. It was the first time Australia and New Zealand have been involved jointly in negotiating an FTA with third countries covering all sectors including goods, services and investment, intellectual property simultaneously.
The agreement is the most comprehensive trade agreement that ASEAN has ever negotiated

How big is the Australia and NZ market?

In 2010:
26 million consumer base US$ 1 trillion in combined GDP US$ 41,300 Australia GDP per capita US$28,000 NZ US$ 224 billion ANZ total imports from the world US$ 0.38 billion RP exports to ANZ

AANZFTA Benefits for Philippine Business

Zero tariff for all products exported to Australia and New Zealand by 2020 Major Philippine exports to Australia like ignition wiring harness, vessels for transport, lead-acid batteries, rubber tires, wheels and other motor vehicle parts, and agricultural products such as canned pineapples, pineapple juice and tuna, will enjoy zero tariffs upon entry-into-force.

Australia Tariff Reduction Commitment

%of Tariff Lines 96.4% 0 % tariff by Year 2010 Products of Export Interest to RP Processed food, beverages, minerals, inorganic/organic chemicals, leather goods, footwear, basket ware, ceramics, fine and costume jewelry, appliances, auto & auto parts, ships & boats, furniture, womens undergarments, cotton jackets/blazers/dresses/skirts/trousers/ blouses/night dresses, overcoats of wool, trousers of synthetic fiber, hosiery, socks, gloves, shawls, ties Cotton mens shirts/babies garments Mens suit/dresses of synthetic fiber, womens jackets/suits of wool

96.5% 96.8%

2012 2015

100.0%

2020

All other articles of apparel and clothing, carpets, wooden office furniture

AANZFTA Benefits for Philippine Business

Export opportunity in Australia for the Automotive Industry

With zero tariffs for Philippine cars, Australia becomes an attractive export market for car and car parts manufacturers. Philippines becomes an alternative investment site for international car companies planning to export to Australia. Australian car exports to the Middle East and even Africa would constitute a valuable market for Philippine parts manufacturers.

AANZFTA Benefits for Philippine Business

Provides broader market access and opportunities for Filipino professionals and skilled workers

Australia expanded definition of Contractual Service Suppliers in their MNP commitment to cover both professionals, including nurses, and skilled workers Australia will accord full working rights to spouses of intracorporate transferees, independent executives and Contractual Service Suppliers if stay is greater than 12 months New Zealand committed Installers/Services and Independent Professionals with advanced technical or professional skills

AANZFTA Benefits for Philippine Business

Temporary Employment in New Zealand of Nurses, Farm Managers and Engineering Professionals

Working Holiday Scheme between New Zealand and the Philippines Funding of Model Dairy Farms from New Zealand

ASEAN-INDIA FTA

The AIFTA negotiation follows a phased approach, starting with the negotiations on the Trade in Goods (TIG) Agreement followed by the Trade in Services and Investment Agreement. The Agreement aims to improve and strengthen economic, trade and investment cooperation through progressive liberalization and promotion of trade in goods and services and create a transparent, liberal and facilitative investment regime. The signing of the Agreement paved the way for the creation of one of the worlds largest free trade area (FTA).

How big is the India market?

In 2010 US$ 1.19 billion market size US$ 4.06 GDP US$ 3,500 GDP per capita US$ 225.4 billion total exports US$225.4 billion exports (ranked 21 in world exports) US$ 359billion imports (ranked 13 in worlds exports) US$ 409.84 million PH exports to India
Source: CIA World Factbook 2010/NSO 2010

AI Trade in Good Agreement

Tariff Elimination/Reduction Modality

1) Normal Track
Category NT1 Modality Elimination by 31 Dec. 2013 for ASEAN 5 and India; 31 December 2018 for the Philippines and India; and 31 December 2013 for CLMV. Elimination by 31 December 2016 for ASEAN 5 and India; 31 December 2019 for the Philippines and India; and 31 December 2016 for India and 31 December 2021 for CLMV.

NT2

AI Trade in Good Agreement

Tariff Elimination/Reduction Modality

2) Sensitive List
Category Category Modality Modality

Reduction of tariffs to 5% Elimination of tariffs

ASEAN 5 and India by 31 December 2016; Philippines and India by 31 December 2019; and CLMV by 2021. ASEAN 5 and India by 31 December 2020; Philippines and India by 31 December 2023; and CLMV by 31 December 2025. 50 TL at MFN 5% will be standstill; remaining TL will be reduced to 4.5% upon EIF for ASEAN 6 and five (5) years from entry into force of the Agreement for CLMV. The AIFTA preferential tariff rate for these tariff lines are further reduced to 4%.

Standstill

AI Trade in Good Agreement

Tariff Elimination/Reduction Modality

2) Sensitive List
Category Category Modality Modality

Reduction of tariffs to 5% Elimination of tariffs

ASEAN 5 and India by 31 December 2016; Philippines and India by 31 December 2019; and CLMV by 2021. ASEAN 5 and India by 31 December 2020; Philippines and India by 31 December 2023; and CLMV by 31 December 2025. 50 TL at MFN 5% will be standstill; remaining TL will be reduced to 4.5% upon EIF for ASEAN 6 and five (5) years from entry into force of the Agreement for CLMV. The AIFTA preferential tariff rate for these tariff lines are further reduced to 4%.

Standstill

AI Trade in Good Agreement

Tariff Elimination/Reduction Modality 3) Highly-Sensitive Track
(Note: India has no HSL track but instead has a Special Products List) Category Modality

Reduction of tariffs to 50%

Reduction of tariffs by 50% Reduction of tariffs by 25%

31 Dec. 2019 for ASEAN 5; 31 Dec. 2022 for the Philippines; and 31 Dec. 2024 for CLMV.

4) Exclusion List
Shall be subject to an annual tariff review

Top Philippine exports to India

Products
TOTAL EXPORTS 1. 2. 3. 4. 5. Other electronic integrated circuits and micro assemblies Electrical machinery and equipment and parts thereof, sound recorders and reproducers Other parts and accessories of the motor vehicles of headings 87.01 to 87.05 Optical disk drives, including CD ROM drives, DVD drives and CD-R drives Vehicles other than railway or tramway rolling stock and parts Newsprint in rolls or sheets Napkins and napkin liners for babies and similar sanitary articles Mineral and chemical fertilizers containing the three fertilizing elements, nitrogen, phosphorous and potassium

2010 Imports US $ Million

409.84 100.06 42.02 33.99 20.95 20.60 16.69 13.21 11.48 8.75 7.65

% Share
100.00 24.41 10.25 8.29 5.11 5.02 4.07 3.22 2.80 2.13 1.86

6.
7. 8.

9.

Other coal, coal briquettes, ovoid and similar solid fuels

Ammonium sulphate

10

Top Philippine imports to India

Products
TOTAL IMPORTS 1.
2. 3. 4. 5. Meat of Bovine animals, frozen Motorcycles and cycles fitted with auxiliary motor with or w/o side cars Other medicaments consisting of mixed or unmixed products for therapeutic or prophylactic treatment Parts and accessories of vehicles of heading 87.11 to 87.13 Other cellular phones, transmission apparatus for radio telephony, radio telegraphy, radio broadcasting or television Oil cake and other solid residues whether or not ground or in the form of pellets Components, parts and accessories of motorcycles and cycles fitted with auxiliary motor CBU other motor cars and other motor vehicles principally designed for the transport of persons Slabs, semi finished products of iron or non alloy steel

2010 Imports US $ Million

537.74 101.11
27.23 23.01

% Share
100.00 18.80
5.06 4.27

17.30
16.47

3.21
3.06

6. 7. 8. 9.

12.40

2.30

9.36
9.10 7.33

1.74
1.69 1.36

AIFTA prospects for Philippine business

FMCG (Fast Moving Consumer Goods) expected
to grow to US$ 340 Billion by 2025 - Opportunities exist in gourmet, ethnic, prepared convenience food, snack food, health and organic food, personal care products, health beverages, etc.
- Food and grocery form the largest segment of the domestic market with 59.5% share. - Furniture and furnishings for homes, contract furniture for hotels have big potential as evidenced by high-end brands in key cities of India.

AIFTA prospects for Philippine business

Business opportunities exist in the internet ventures, outsourcing technology, e-commerce opportunities, software development, animation, computer graphics and designs. The Indian automobile industry continues to show rapid growth and the sector presents opportunities for Filipino automobile manufacturers particularly in the aftercare and replacement market and for products driven by a high degree of design. Education - Indias big young population will continue to create a demand for higher education. Reservation policies and quota system designed to promote education opportunities contribute to the large growth of Indians who study abroad.

ASEAN-EU FTA
1977 Special Meeting of ASEAN FMs proposes to establish ties with EEC 1980 EC ASEAN Cooperation Agreement Commercial, economic and technical cooperation Joint Cooperation Committee 1994 11th ASEAN-EU Ministerial Meeting in Karlsruhe Eminent Persons Group (comprehensive approach 2000 and beyond) 2003 Communication New Partnership with SE Asia comprehensive framework (economic, political, security) TREATI and READI 2005 Partnership and Cooperation Agreements + EU-ASEAN Aceh Monitoring Mission 2006 (Dec) EU/EC applied for accession to the ASEAN Treaty of Amity and Cooperation of 1976 2007 (March) Nuremberg Declaration and Plan of Action 2007 (Nov.) EU/ASEAN Commemorative Summit

ASEAN-EU Cooperation Programs

Package of EUR 70 million (2007-2013) ASEAN Programe for Regional Integration Support (APRIS II) EUR 7.2 million standards/SPS, C/TF, investment, capacity building, dialogues Enhancing ASEAN FTA Negotiation Capacity EUR 2.5 million Vientiane Action Plan/AEC ASEAN Cooperation Project on the Protection of Intellectual Property Rights ECAP III EUR 4.5 mn legal, administration, enforcement, awareness ASEAN Air Transport Integration Project EUR 5 million ASEAN Migration and Border Management Program EUR 4.7 million EU-ASEAN Statistical Capacity Building Program EUR 6 million ASEAN Centre for Biodiversity EUR 6 million Program to enhance National Human Rights Institutions EUR 900,000

How big is the EU market?

In 2011

502.52 million market size

ASEANs 2nd largest trading partner ASEAN is the EUs 5th largest trading partner

ASEAN-EU FTA
ASEAN-EU Vision Group (2005/06) report
Governing principles: comprehensive (goods, services/investment, TF, Competition, GP, IPR); WTO compatible; 90% trade in goods tariff-less in 7 years; broad sectoral coverage and elimination of substantially all discrimination in area services/investment; SDT for less developed ASEAN and asymmetrical liberalization; single undertaking Gains to ASEAN MS up to 2% of GDP by 2020 bulk of gains associated with liberalization in the area of services Cooperation support ASEAN integration

EU-PHILIPPINES RELATIONS
Partnership since 1976 EUR 1 billion in cooperation + sectoral/political dialogue EUR 130 million (2007-2013) Comprehensive partnership: Governance (support to Ombudsman, Anti-Money Laundering Council, Border Management, Access to Justice for the Poor) Rural development (STARCM, UDP) Health (DOH, ARMM) Human rights (Death penalty, EJKs/EUJAM) Peace (MTF, IFS) Humanitarian aid (IDPs, disaster)

EU-PHILIPPINES PARTNERSHIP COOPERATION AGREEMENT

Signing of the agreement will be on 12 July 2012 at the sidelines of the Association of Southeast Asian Nations (ASEAN) Regional Forum in Phnom Pehn, Cambodia
The PCA will broaden the scope of PH-EU relations in areas such as counter terrorism, fight against corruption and organized crime, trade and investment, migration and energy, competition, IP protection for design industries.

RP-US FTA
Trade and Investment Framework Agreement (TIFA) (MOU signed in1989) Enterprise for ASEAN Initiative (EAI) launched by US President George Bush on October 26, 2002 US and individual ASEAN countries will jointly determine if and when they are ready to launch FTA negotiations US-Singapore FTA Signed May 6, 2003 1st US FTA with an Asian nation and 1st FTA signed by Bush Ongoing US FTA Negotiations Taiwan, Thailand, Indonesia, Japan and South Korea

Enhanced PH-US trade relations under ASEAN?

It encompasses issues involving investment, intellectual property rights, various key services, harmonization of product standards, mutual recognition of product testing, labor standards and environment issues It will help the Philippines comply with internationally recognized standards that will, in turn help install a competition policy, reduce investment distortions, improve implementation of existing intellectual property protection, and improve corporate and government transparency. (Seiji, 2005:5) It is expected to also pave the way for preferential access for exports to the US market for garments and textile products

How big is the US market?

314 million market base as of 2012 US$ 14 trillion GDP US exports US$182.9 billion It is the worlds third largest exporter As of 2010, Ph total trade to US is US$20 billion - PH exports (US$ 10.6 billion) - PH imports (US$ 9.4 billion)

PH-US vs. ASEAN-US FTA?

It encompasses issues involving investment, intellectual property rights, various key services, harmonization of product standards, mutual recognition of product testing, labor standards and environment issues It will help the Philippines comply with internationally recognized standards that will, in turn help install a competition policy, reduce investment distortions, improve implementation of existing intellectual property protection, and improve corporate and government transparency. (Seiji, 2005:5)

It is expected to also pave the way for preferential access for exports to the US market for garments and textile products
Ph special interest is greater access to US market for agricultural goods (e.g. sugar, fresh and canned fruits, etc.).

ISSUES AND CHALLENGES (internal to ASEAN)

Divergent levels of development Level of experience in negotiating FTAs Divergent levels of ambition FDI recipient vs. FDI provider Harmonization of of rules of origin Harmonization of barriers to trade Homogeneity of ASEAN export products Displacement of workers and rationalization of industries and firms Adjustments by industries especially SMEs Possible trade diversion Implicit economic costs Loss of tariff revenues

ISSUES AND CHALLENGES

(considerations for the Philippines)
Political Gainers and losers Key issues
Bilateral Internal (domestic) Across sectors

Negotiating strategy
Very tricky and complicated Question of resources

ISSUES AND CHALLENGES (necessary to ASEANs partners)

Trade barriers and Reciprocal trade in

distortions Trade in services Foreign investment Intellectual Property Transparency Anti-Corruption Improvement of WTO Regulatory practices Electronic Commerce

Agriculture Labor and the environment Dispute settlement and enforcement WTO extended negotiations Trade remedy laws Border taxes Textile negotiations Eliminating child labor

Strategic roadmap: 2015 and beyond?

Where are we now? Are we ready to compete and harness the opportunities of an integrated regional economy? What can we do and cannot do to take advantage of ASEAN economic community? What policies we need to develop, support, amend or repeal to move forward in our regional integration strides? What are the sectors we need to support given their competitive advantage? What kind of support? What safety net can the government and private sector provide to sectors and industries that will be affected by the ASEAN integration? How do we bring the PH SMEs in the stream of supply chain activities to benefit from ASEAN integration?