Exporters and manufacturers have urged the Marcos administration to be careful in giving out concessions to the Trump regime as the two countries negotiate over the US-imposed reciprocal tariffs.
Jesus Arranza, chairman of the Federation of Philippine Industries (FPI) said in an interview yesterday his group has asked the Marcos government to consider the impact on domestic industries of the Philippines’ plan to forge a free trade agreement (FTA) with the United States.
Arranza also raised alarm over the possible impact on domestic industries of what he fears could be a surge of imports from countries slapped with higher US tariffs and are finding the Philippines a good alternative market.
Arranza said in the face of high tariffs, China for example, will look for other markets “and the Philippines is very easy to penetrate”. He did not elaborate.
In a phone interview after Tuesday’s government-led consultation on the US tariffs, Sergio Ortiz-Luis, president the Philippine Exporters Confederation, said the Philippines is in a better position to seek concessions since “we are not the target” of those high tariffs, which is to balance trade.
“Let’s not readily give away things in the negotiations. We are, in fact, qualified to ask for concessions. We are a small player,” Ortiz-Luis said.
He said while exporters find it “good that the government is addressing concerns” over the tariff, “it should be careful and analyze what it should offer.”
Without mentioning specific products, Ortiz-Luis said likely to be affected is the agriculture sector. The Philippines buys frozen meat, as well as commodities such as wheat and soybeans from America.
On the planned FTA with the US, Arranza said that since this would entail giving concessions such as lower tariff on certain US goods purchased by the Philippines, “the government should consider the impact of these concessions on local industries, since products imported at zero or low tariff will compete with locally-produced ones.”
In a statement issued also on Tuesday, Arranza said the FPI is gathering position papers from member-organizations on Manila’s bilateral trade negotiating strategy with Washington “ to allow the country’s trade panel to firm up a negotiating stance that considers the offensive interest of exporters to the US, while also ensuring the competitiveness of domestic industries versus American-made products.”
“We have to make sure that industries are heard so our defensive and offensive interests are balanced, and we need to move fast because President Donald Trump only gave a 90-day window to close a bilateral deal with the US,” Arranza said.
He added the position papers of the industry associations would indicate their negotiating stance and “wish lists” for incorporation in the notes of the government’s trade panel.
“We need to hurry because other countries, including our Asian competitors, have started talking to Washington. We don’t want our exporters to lose their competitiveness in the US market if we end up not concluding a deal before the end of the 90-day pause on July 8,” Arranza said.
Trump suspended the implementation of his administration’s reciprocal tariffs for 90 days and is implementing the baseline 10 percent tariffs. After this period, the Philippines is looking at a 17-percent reciprocal tariff should it fail to close a deal with the US, plus a host of other additional levies, including the so-called Section 232 tariffs.
Section 232 of the Trade Expansion Act of 1962 empowers the US president to restrict imports of products that are found to threaten or impair national security. Along this line, the US initiated an investigation into products such as pharmaceuticals and pharmaceutical ingredients along with semiconductors and semiconductor manufacturing equipment.
Reacting to the possible ways to boost the Philippine bargaining posture, Arranza said:
“The FPI and its member-industry associations are ready to work with our trade panel to make sure we can come up with a well-balanced negotiating strategy at the soonest possible time.”
Ortiz-Luis also said the Philippines should strengthen its exports to China, which is catching up with the US as a major export market for local producers.
