the trans pacific partnership and the philippine …...2015/09/01 · the trans pacific partnership...
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The Trans Pacific Partnership and the Philippine Economy: Joining the Big League
Cielito F. Habito
Chief of PartyTrade-Related Assistance for Development (TRADE) Project
Presentation for the AmCham-COCUSA-TRADERoundtable on TPP and the Philippines
AmCham Conference HallSeptember 1, 2015
TPP: What is it?
An ambitious ‘new generation’, ‘high-standard’ trade agreement
Currently with 12 participating countries on both sides of the Pacific having:
• Combined population of 800 million
• GDP of $28 trillion (40% of global GDP)
• $9 trillion in merchandise trade; $2 trillion trade of services (30% of world trade)
TPP: Who are in it?
• Australia (2008)
• Brunei (2005)
• Chile (2005)
• Canada (2012)
• Japan (2013)
• Malaysia (2010)
• Mexico (2012)
• New Zealand (2005)
• Peru (2008)
•Singapore (2005)
•United States (2008)
•Vietnam (2008)
TPP & Existing FTAs Current TPP members already form part of
a growing network of Asia-Pacific FTAs.
Source: WTO FTA database and websites of TPP countries’ trade ministries. Trade data from IMF.
TPP & Existing FTAs
Source: WTO FTA database and websites of TPP countries’ trade ministries. Trade data from IMF.
Notes: TPP goods trade, both imports and exports, as reported above. ASEAN also includes countries outside the TPP: Burma (Myanmar), Cambodia, Indonesia, Laos, the Philippines, and Thailand. TPP goods trade covered by existing FTAs, as depicted above, reflects all goods trade between FTA partners. This measure slightly overstates trade covered under FTAs, as most FTAs exclude market access for at least some goods.
TPP: Who are hoping to come in?‘Second Wave’ Countries
• South Korea
• Taiwan
• Thailand
• Colombia
• Indonesia
• Philippines
TPP: What will it do?
Comprehensive Market AccessEliminate tariffs and other barriers to trade in goods & services and investmentto create new opportunities for workers and businesses, and immediate benefits for consumers.
Fully Regional AgreementSpur development of production & supply chains across members, creating jobs, raising living standards, improving welfare and promoting sustainable growth among them.
New Cross-Cutting Trade Issues
Regulatory Coherence – Promote more seamless & efficient trade across borders
Competitiveness & Business Facilitation – Enhance domestic/regional competitiveness; push economic integration (via regional supply/value chains)
Small & Medium-Sized Enterprises – Internationalize SMEs and raise their utilization of FTAs
Trade & Development – Strengthen economic devt & governance institutions via comprehensive & robust market liberalization, trade & investment enhancing disciplines
New Trade Challenges
Promote trade & investment in innovative products and services, including those related to the digital economy and green technologies
Living Agreement
Enable updating of the agreement as appropriate to address new emerging trade issues and new issues arising from inclusion of new members
The TPP Agreement: What will it address?
Goods & Services
- Textiles, Apparel & Footwear
- Trade in Services
- Government Procurement
Agriculture
- Sanitary & Phytosanitary Standards (SPS)
- Tobacco
- Geographical Indications (GIs)
- Agricultural Competition
Core Negotiating Issues
Market Access
Intellectual Property Rights (IPR)
- Copyrights & Patents
- Access to Medicines
- Biologics, Trade Secrets
Rules of Origin
Technical Barriers to Trade (TBT)
Transparency and Pricing of Health Care Technology & Pharmaceuticals
Core Negotiating Issues
Rules
Foreign Investment
Competition Policies
Trade Remedies
Labor
Environment
E-Commerce and Data Flows
Customs and Trade Facilitation
Core Negotiating Issues
Rules
Regulatory Coherence
State-Owned Enterprises
Competitiveness and Global Supply Chains
Small- and Medium-Sized Enterprises
New and Cross-Cutting Issues
Institutional Issues Secretariat
Dispute Settlement
“Living Agreement”
The “Noodle Bowl”
Chapter Highlights Trade in Goods
Expand market access thru elimination of tariff & non-tariff barriers; provisions on import licensing, import/export restrictions, temporary importations, goods re-entered after repair, and commercial samples.
Rules of Origin (ROO)
Objective, transparent and predictable rules for establishing origin within TPP; rules/treatment that apply to certain products/goods (e.g. fungible materials, spare parts, packaging materials)
Chapter Highlights Services and Investment
- Covers wide range of sectors; all existing measures affecting cross-border trade in services; investors and their investments
- Adopts negative list approach
- Commitments scheduled at the level of regulatory application
- Ratchet mechanism to lock in future reforms
Competition Policy
Establish competition laws & competition authority, with obligations on enforcement, transparency, consumer protection & private rights
Chapter Highlights
Government Procurement
- Basic principles & procedures for conducting procurement in a fair, transparent, and non-discriminatory manner
- Defines coverage of procurement and specifies obligations on use of electronic means for procurement, conditions of participation, publication of notices, time-period and modification and rectification
- Re-affirms rights and obligations under the WTO-GPA; adopts APEC Non-binding Principles on GP
Chapter Highlights
Telecommunications Services
Competitive access; non-discriminatory interconnection; transparency of regulatory process; right of appeal
E-Commerce
Customs duties; authentication of transactions & e-signatures; consumer protection; free flow of information and paperless trading
Chapter Highlights
Cross-Border Services
Open & transparent cross-border services trade among TPP
Customs Procedures
Predictable and transparent rules & procedures on automation, risk management, express shipment & advance rulings
Sanitary & Phytosanitary (SPS) Standards
Builds on WTO SPSA to balance animal/plant health protection & TF; new commitments on transparency, regionalization, cooperation & equivalence
Chapter Highlights
Technical Barriers to Trade (TBT)
Sets compliance periods, conformity assessment procedures, international standards, institutional mechanisms and transparency
Intellectual Property
Reinforces WTO TRIPS Agreement with specific provisions on trademarks, geographical indications, Internet domain names, copyright &related rights, patents, cable signals, encrypted programs; and regulated products, genetic resources and traditional knowledge
Chapter Highlights
Investment
Investor & investment legal protection e.g., non-discrimination, minimum standard of treatment, expropriation, etc.; expeditious, fair, and transparent ISDS
Financial Services
Investment in FIs, cross-border trade in financial services; transparency, non-discrimination, investment protection; protects right of financial regulators to ensure integrity & stability of financial markets, including in financial crises.
Why still ‘No Deal’?
Access to the Japanese agricultural &industrial markets
Rules of origin for auto parts (of particular concern to Mexico)
Workers’ rights, especially in Vietnam
Environmental protections
Labor standards
Patent protection and access to generic medicines in developing countries
Open Issues after Maui (2015):
TPP: Why still ‘No Deal’?
Copyright protections for entertainment content, including on the Internet
Investment and dispute settlement procedures, particularly the use of investor arbitration rights to block local government actions
Food safety measures, and making sure that arbitrary and scientifically indefensible barriers are not allowed to block imports (controls on GMOs, for example)
Restrictions on state-owned enterprises (SOEs)
Tobacco controls and rules on cigarette packaging
More Open Issues after Maui (2015):
Philippines & TPP• Signed the 2011 Phil-US Trade Facilitation Protocol
• Expressed interest to join negotiations
• Efforts to ease foreign ownership restrictions
• March 2014 technical consultations in US
• Consultations with 5 other TPP members
• DTI: Roadmap to TPP focused on
- Stakeholder engagement in trade policy‐making
- Trade policy research
- Capacity-building
- Enhanced inter-agency cooperation
Implications of Philippine Membership in TPPClarete (UP School of Economics) Study (2014):• Increase exports by up to 42% • Raise GDP by up to 59%
Cororaton (Virginia Tech) Study (2014) :
• Non-membership will divert substantial trade away from PH to TPP members
• Vulnerable industries: Textile & wearing apparel, petroleum products, construction, services, equipment manufactures
• Membership will increase exports by $300 million in 2015, rising to $3 billion by 2024
Questions to Address
• Given the above, what do you think are the key shortcomings that PH must address to be able to join TPP?
• What in your view are the most important actions PH must take to be “TPP-ready”?
• How would your industry/company be benefited by PH accession to TPP?
• How might your industry/company be impacted by PH exclusion from TPP?
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