The Philippines anticipates that the United States will rekindle its interest in negotiating a bilateral free trade agreement (FTA) with the return to power of President-elect Donald Trump.
The Philippines does not expect to be impacted by Trump’s tariff moves, thanks to its healthy trade balance with the US.
“President Trump, in his first term in office, even suggested that he was in favor of a free trade agreement with the Philippines. What we’re banking on is that the Philippines is recognized to be a key ally of the United States, that should count for something,” Secretary Frederick Go of the Office of the Special Adviser to the President on Investment and Economic Affairs told ANC.
Go is hopeful the Philippines’ relationship with the US will get better.
Ceferino Rodolfo, undersecretary of the Department of Trade and Industry (DTI) said of all recent US presidents, it is Trump who has welcomed officially a bilateral FTA with the Philippines.
“We are very hopeful that Trump 2.0 is a net positive for the Philippines. If you go by (Trump’s) track record during this administration, as well as the track record of people he has nominated to be part of his administration in key departments and agencies of the US government … They have all been supportive of a stronger, closer relationship with the Philippines including for an FTA,” said
Rodolfo, in his speech at the opening of the National Exporters Week in Pasay City on Monday.
In a text message to reporters, Rodolfo said Go and Trade Secretary Cris Roque are closely collaborating for specific actions to ensure even closer economic relations with the US, in preparation for the assumption into office of Trump.
“We believe that we are in a good position to push for a more robust framework for economic partnership and cooperation considering the official actions of President Trump during his first term/administration,” he said.
Rodolfo cited a joint statement by Trump and then President Rodrigo Duterte in November 2017 where they said “The United States welcomed the Philippines’ interest in a bilateral free trade agreement and both sides agreed to discuss the matter further through the United States-Philippines TIFA (Trade and Investments Framework Agreement).”
Rodolfo said the US Trade Representative of the Trump administration Ambassador Robert Lighthizer testified at the Senate committee hearing on appropriations where he declared: “We are close to beginning negotiations” and that “a number of East Asian countries are interested in an FTA with the US.”
Rodolfo quoted Lighthizer as saying “one that we particularly liked is the Philippines and I think it would be a good first agreement. “
Rodolfo also said the incoming USTR of Trump, Jamieson Greer, was the former chief of staff of Lighthizer.
Lighthizer continues to be an adviser of the US leader, according to Rodolfo.
He noted the nominee of Trump for the US State Department is Sen. Marco Rubio who in June introduced a bill that would strengthen US-Philippine partnership.
“Among others, that bill calls for the State to directly negotiate a critical minerals agreement with the Philippines and amend the BUILD Act to explicitly support investments in critical minerals and
energy products in Southeast Asia including the Philippines,” Rodolfo said.
The bill also requires an interagency plan on US support for infrastructure development in the
Philippines. It directs the State to support multilateral engagement between the Philippines,
Korea, and Japan.
Rodolfo said also going by the track record of Trump on how he views trade, a major issue for him is how to address the US trade deficit against other countries.
“If you have huge trade surplus with the US, (Trump attributes this) to unfair trade practices, including currency manipulation, export subsidies, stealing technology from the US,” Rodolfo said.
Countries largely affected by the US tariff increases are China and Vietnam which is a fierce rival of the Philippines.
“Between the time when President Trump left office to his assumption now, the trade deficit of the US with Vietnam has ballooned. If you look at official records, the US during the first administration of Trump has determined Vietnam
has been using unfair trade practices vis- a- vis US.
For sure, Vietnam will be targeted now in the US,” Rodolfo said.
Fortunately, the Philippines’ trade surplus with the US is just at $4 billion, he said.
“In effect, we have a healthy almost trade balance with the US,” he said.
It also helps the US defines trade surplus and deficit is in terms of goods alone. The Philippines has a significant trade with the US on services. “We have healthy relationship… we are confident very confident moving forward, the Philippines will be in a much better place when it comes to US trade policies,” Rodolfo said.
