A third urgent bill advocated by exporters and other groups but still hangs in the Senate is the setting up of a Trade Representative Office, an office tasked to attend to trade negotiations for the Philippines.
The proposed office seeks to correct the present set up in which three separate government agencies are involved in trade talks for the World Trade Organization. This includes a DTI team involved in non-agricultural market access, a Department of Agriculture team involved in talks on farm trade and a NEDA team involved in negotiating for trade in services.
Still another team led by the DTI is involved in on-going talks in the ASEAN Free Trade Area and the Asia-Pacific Economic Cooperation group. -- Abe P. Belena, PHILEXPORT News and Features <--back
2. ILO member-countries to implement global jobs pact to deal with crisis
Member-countries of the International Labor Organization (ILO) had approved and is now promoting a Global Jobs Pact as a strategy to coordinate efforts to coax the global economy into faster recovery through the creation of jobs.
The pact was unanimously approved by national governments, business leaders and labor federation leaders from across the world during the June 15-17, 2009 ILO Summit on the Global Jobs Crisis held in Geneva Switzerland, Juan Jomavia, ILO Director General, said.
“The damage to employment is causing hardship to many working women and men, families and communities, thereby worsening poverty,” Jomavia pointed out.
“In addition, with 45 million new entrants to the global job market annually, some 300 million new jobs will need to be created from now to 2015,” the ILO head added.
ILO has urged signatories to the pact to implement its salient provisions pact in their respective countries.
In the policy front, the pact proposed measures to retain women and men in employment as far as possible and sustain enterprises, in particular small, medium-sized and micro-enterprises.
It likewise sought governments to support job creation, promote investments in employment-intensive sectors including green jobs as well as facilitate more rapid re-entry into employment of those who lost their jobs during the crisis and address wage deflation.
The ILO pact likewise called for employers, governments, and organized labor to protect persons and families affected by the crisis, in particular the most vulnerable and those in the informal sector of the economy by strengthening social protection systems to provide income support and sustain livelihoods as well as security of pensions.
It also called for the acceleration in the recovery of employment and expand opportunities by acting simultaneously on labor demand and labor supply. At the same time, governments were called to equip workers with the skills needed for present and future jobs.
“Adopted in an integral and coordinated manner, these policies can reduce social tensions, mitigate the negative impact of the recession on people, stimulate aggregate demand and reinforce both competitive market economies and a more inclusive growth process,” Jomavia stressed.
Those measures have been designed to reverse the prospect for a prolonged increase in unemployment, deepening poverty and inequality especially in the developing and the least developed world.
Among its more focused recommendations, the pact shunned a return to protectionism among nations but called for fair globalization that spreads wealth wider, particularly in countries constrained by lack of money to accelerate their recovery.
It further called on multi-lateral agencies to increase their assistance to countries that are most vulnerable to the ill-impact of the lingering global economic crisis. -- Abe P. Belena, PHILEXPORT News and Features <--back
3. RP goods to gain duty-free access to China, ASEAN markets
Philippine exporters are advised to further improve their products and services to brace for tougher competition when local goods gain duty-free access to the emerging markets of China and neighboring Asean countries starting next year.
Dr. Alfonso Uy, Federation of Filipino-Chinese Chambers of Commerce and Industry, Inc. president, in an interview said the full implementation of the China-ASEAN Free Trade Area (CAFTA) in 2010 paves the way for the Philippine products to penetrate the huge 10 market economies.
Uy said CAFTA has a combined population of 1.9 billion and an aggregate gross domestic product (GDP) of nearly $6 trillion.
“Through CAFTA, we look forward to Philippine exporters enjoying many benefits like tariff concessions, preferential access to some sectors and faster entry into these markets,” he said.
Under the free trade area agreement, about 93 percent of traded goods between China and the ASEAN countries will be exempted from tariff starting January 2010. The consumers on both sides will have wide-ranging choices of more than 7,000 zero-tariff items in the market.
Uy pointed out that the Chinese market alone offers huge business opportunities, citing the strong buying power of its middle class which is now close to 400 million people.
“And the Chinese are also curious about products of other countries. So a combination of those factors would mean that there is a very good chance that our products can get into that market,” he added.
To effectively capture these emerging markets, Uy urged businesses to develop quality products.
“We must be more competitive and further improve our products and services so we can better connect with new markets and our neighboring countries’ economies,” he stressed.
Uy said exporters should prepare themselves in order to conquer the challenges posed by competition.
“With our creativity, diligence, quality products, definitely, we should be able to compete,” he said. “Competition is good in fact. It will encourage people to become more productive, to become more efficient and to make sure they can satisfy the needs of the consumers,” he said.
The framework agreement on a comprehensive economic cooperation for the creation of CAFTA, with all parties in agreement that an FTA be established in 10 years, was signed between the leaders of ASEAN and China during the November 2002 ASEAN-China Summit in Cambodia.
To accelerate the implementation of the agreement, the early harvest program (EHP) for trade in goods was implemented on January 2004, with the Philippines initially excluded from the agreement due to issues that stalled negotiations with China. The Philippines was only able to implement the EHP in early 2006.
EHP scraps tariffs on about 600 agricultural imports on both sides by that year 2006.
ASEAN now comprises Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam. -- Danielle Venz, PHILEXPORT News and Features <--back
4. Exporter-supplier linkage for product development pushed
An export firm has raised the need to strengthen linkage between exporters and possible raw material suppliers to improve product development processes.
Marlane Villa-Real, president of the Buy Pinoy Movement Foundation Inc, said such linkage will have mutual benefit. Exporters have ready buyers and know-how in product development while non-exporters can supply the raw materials for their products.
“What is important is for exporters to continuously engage in product development. For me, you cannot do product development alone; you have to link with others to be effective. You can do certain things alone but you can develop a wide range of products by linking with others,” she said in an interview.
Villa-Real cited an example of beautiful corn flowers which an exporter can develop into other products just using the raw material and then market these goods.
She said such linkage already worked for a group of enterprises based in Nueva Ecija. The group started subcontracting and after a while, it was able to develop their own products and market these in trade fairs.
“The enterprises in this group are bonding together which help (expose products of) the province. I hope there would be more groups like them all over the Philippines. There is strength in working together,” she noted.
Villa-Real cited the need to develop the domestic market even as the global economy is slowly picking up.
“When I go around different countries, they strengthen their domestic market first before they export. In the Philippines, it looks like (businesses) immediately export without setting up a domestic market yet. Now that export sales have weakened, exporters come to experience the huge potential of the domestic market,” she said.
Exporters thus should continuously make different products to better serve both the local and international markets, added Villa-Real, also the chairman and chief executive officer of Buena Mano Crafts, Inc. The firm is a manufacturer and exporter of handcrafted Christmas and other holiday decors.
“This year was really bad (for the market) but I think, it is slowly picking up. I’m basing this observation on the last October Manila FAME because I have seen some buyers who were not buying anymore in the past few years and they were starting to order again,” she said.
With these indications, Villa-Real expressed optimism that export sales will gradually improve as industry players also explore other markets.
“If I relied on the American market, our company would have closed a long time ago. From the US market, we moved on to penetrate the European market, Middle East, Japan and now most possibly the Chinese market. Russia is also one potential market,” she further said. -- Danielle Venz, PHILEXPORT News and Features <--back
5. Productivity-based, competition-oriented strategy to hasten agricultural growth
The Philippines must employ productivity-based and competition-oriented strategy as an alternative to the existing development strategy to sustain and accelerate agricultural growth.
This recommendation was made by Dr. Roehlano Briones, Senior Research Fellow at the Philippine Institute for Development Studies (PIDS), based on the findings of a major research project entitled Productivity Growth in Philippine Agriculture Project (PGPA).
PGPA is a collaboration among the Southeast Asian Regional Center for Graduate Study and Research in Agriculture (SEARCA), Department of Agriculture-Bureau of Agricultural Research and Philippine Rice Research Institute.
“Investments in productivity lead to faster and sustained growth,” he said.
Briones said the country should go “back to basics” by focusing on development and dissemination of new techniques, varieties and improved planting materials; and research and development, education, extension/information.
He also cited the need to develop rural infrastructure for connectivity and improve governance to boost agriculture productivity.
Briones pointed out the current development approach of the Department of Agriculture like the FIELDS program is inward-oriented and subsidy-based.
FIELDS stands for key programs in agriculture -- Fertilizers; Irrigation and infrastructure; Extension, training and education; Loans; Dryers and other postharvest facilities; and Seeds.
“Input subsidy is not essential –-an expensive instrument for promoting agricultural growth,” he said.
Apart from improving productivity, Briones said, the agriculture sector can also grow through expansion of agricultural area and increasing other input. -- Danielle Venz, PHILEXPORT News and Features <--back
6. Local industries urged to contribute to a meaningful trade-related public consultation
While the government strives to safeguard the interest of the local industries, it cannot do much without the meaningful involvement of all relevant stakeholders in the public consultation process.
According to Atty. Jeremy Gatdula, Director at Trade Advisory Services, local industries should help the government conduct a substantive public consultation that involves coming up with very specific recommendations in their position papers.
To help in this process, local industries may commission university-based think tanks to provide them with both quantitative and qualitative analysis of the impact of the tariff policy on the performance of the sector. Doing so will lend greater rigor and credibility to their policy requests, he suggested.
The policy request of a sector also stands a good chance of being heard by the government if it is able to show that the potential gains from approving the policy request outweigh the potential losses that may be incurred to the other sectors, he further noted.
Notably, requests for tariff modification are made in pursuit of the narrow sectoral interest with complete disregard of the potential gains and losses that the tariff change may bring to other sectors.
Alongside the importance of drafting substantive position papers, Atty. Gatdula emphasized the need for industry players to know the global rules of trade and the trade policies of the country. He pointed out that very few industry players are cognizant of the fact that the Philippines maintains a substantial tariff policy space.
“They do not know that many of our tariff rates are significantly below the maximum tariff levels (bound rate) that we committed to the World Trade Organization (WTO),” he said. “This means that generally, industry players can request for a significant tariff raise without having the government to pay just compensation to its trading partners that have substantial supplying interest in the product concerned.”
For industrial goods, the country's average applied rate is at seven percent, while the average bound rate is 23.4 percent. The country may therefore raise its tariff on the average by 16 percentage points.
Meanwhile, the country registers an average applied rate of 11 percent on farm products against its average bound rate of 34 percent, yielding a tariff policy space of 23 percentage points.
With the conclusion of the Doha Development Round remaining a distant possibility, it would be good for the industry players to request for tariff modification and work with the government in maximizing the existing tariff policy space, Atty Gatdula pointed out. -- Ritchie Alburo, PHILEXPORT News and Features <--back
