The Philippines’ economic officials are gearing up for the three final rounds of negotiations between Asean and Canada for a free trade agreement that will happen within the year, the Department of Trade and Industry (DTI) said.
This came from Director Marie Sherylyn Aquia of the DTI’s Bureau of International Relations who joined a virtual public consultation on Wednesday.
Aquia said prospects are bright for a free trade agreement between the Philippines along with the rest of ASEAN, and Canada, a major trade partner.
Citing a feasibility study jointly made by the Philippines and Canada in 2018, Aquia said the country can expect a 2.63-percent increase in its gross domestic product (GDP) equivalent to $7.4 billion.
She declined to say when exactly the negotiations will start.
The proposed ASEAN-Canada free trade agreement (ACFTA) is expected to be concluded this year amid the worsening disruptions caused by US President Trump’s tariff policies.
The joint feasibility study would show an improved market access to trade in goods, the reduction in the non-tariff measures and improvements in trade facilitation.
Aquia said the Philippines can attract more investments from Canada under the ACFTA. “An FTA with Canada will provide a stable and predictable legal regime and business environment, including preferential treatment for Canadian businesses,” she said.
Concessions
Aquia said the Philippines also wants to maintain the concessions it receives from Canada’s General Preferential Tariff scheme.
Similar to the Generalized System of Preferences given by the European Union, GPT grants preferential access to certain Philippine products subject to certain conditions like rules of origin.
Canada’s GPT grants preferential access on Philippine agricultural products such as coconut-based goods, tropical fruits, and seafood, textiles and garment such as apparel products as well as manufactured goods in industrial products like electronics and machinery, the DTI said.
Aquia added while progress on the ACFTA talks has been slow, the goal is to substantially conclude the negotiations by 2025 and for the market access negotiations to be concluded by 2026.
Citing figures from the Philippine Statistics Authority (PSA), Aquia said Canada was the Philippines’ 20th top trading partner in 2024 with the Philippines importing $932 million worth of goods against its exports of $600 million.
“There is a stronger demand for Canadian products. But there is an opportunity to increase Philippine exports to Canada,” she said.
Top exports to Canada include ignition wiring sets, electronic integrated chips, vacuum cleaners and machines for voice conversion.
Top imports from Canada are precious metals and agriculture products like frozen meat, wheat and frozen ham.
Foreign investments from Canada approved by investment promotion agencies last year stood at P144.76 million, a 39-percent decline from 2023’s P237.49 million.
Analyst view
John Paolo Rivera, senior research fellow at the the Philippine Institute of Development Studies, told Malaya Business Insight DTI’s projection of a 2.63 percent increase in Pilippine GDP due to the ACFTA “seems optimistic but not implausible, provided several enabling conditions are met.”
These conditions, Rivera said, include meaningful tariff reductions and non-tariff barrier eliminations, improved trade facilitation and customs interoperability and market access for key Philippine exports like electronics, processed food and services.
“Realizing the full GDP benefit would depend not just on the text of the FTA but also on domestic competitiveness, supply chain capacity, and investment climate readiness,” he added.
