New Age FTAs: Is the Philippines Mature Enough?

Synthesis and RecommendationErlinda M. Medalla

Feb. 10, 2011Dusit Hotel

New Age FTA: Is the Philippines mature enough?

Differentiate with: whether forging such FTAs would be beneficial.• Mature enough to study and recognize benefits

and costs?• Mature enough to get a good deal? Deal with

domestic concerns on the one hand and negotiate wisely with prospective partners?

• Mature enough to take advantage of opportunities and overcome challenges?

Mature enough to take advantage of opportunities and overcome challenges?

• While important, the first two are not the more critical issues:– Thailand has become a ‘pro’, Indonesian learned

quickly, Philippines has learning experience from PJEPA

– This workshop is also a good indicator• Third is much more difficult and ambitious.

This is the bottom line.

‘New Age FTAs’

• Free flow of goods, services and investment. Cooperation elements and capacity building

• It’s not just about trade and market access.• Ultimately, it’s about economic reforms: for both or all

partners • This is well recognized in the case of Korea: the main

objectives of FTAs are:– To secure market access and (2) to enhance transparency and

predictability.• This is true as well in the case of Japan- also for domestic

reforms.

Impact on Governance

• two way: – good governance would help maximize benefits from

FTAs– at the same time, FTAs could contribute to good

governance (not just because of the need for it , made even more obvious and urgent because of joining an FTA, but because of the development cooperation initiatives ‘new age’ FTAs make possible.

• This is especially true for regional FTAs- with added peer pressure to implement reforms. Learn from best practice

• Examples that this is happening are in the areas discussed in this workshop: customs administration and competition policy

• In customs –National Single Window, eventually leading to the ASEAN single window – very much a part of good governance. – The Philippines is hard pressed to make headway in customs

reforms.• ASEAN cooperation in competition policy• These are two very difficult areas for reforms• FTAs- Use in conjunction with strategic industrial policy

– Not just as defensive mechanism

Impact on Governance

Concluding Remarks

• It is not just about trade and market access. It is also very much about economic reforms and improving governance

• Consistency with WTO in the long-run should always be kept in mind.

• Managing risks to ensure FTAs become building blocs

Recommendations

• Improve intra and intergovernmental coordination mechanisms for coordinated policy decision making process;

• Enhance participation of private sector through business advocacy, consultation, observer status in negotiations; and

• Networking of negotiators, academe/experts and business/industry sector as well as civil society

• Linked with call for increased transparency

Recommendations

• Continue domestic reforms – infrastructure and logistics, trade facilitation

• Need for capacity building, information and advocacy-– Research– Advocacy– information and education– Negotiating capability—HB 56?