United States dollar banknotes and American flag displayed on a laptop screen are seen in this multiple exposure illustration photo taken in Poland on Dec. 26, 2022. — JAKUB PORZYCKI/NURPHOTO VIA CONNECT

By Keisha B. Ta-asan, Reporter

THE PHILIPPINE EMBASSY in the United States is prioritizing the renewal of the country’s participation in the US Generalized System of Preferences (GSP) trading scheme, the ambassador said.

Philippine ambassador to the US Jose Manuel D. Romualdez told BusinessWorld the Philippines has a better chance of renewing the GSP as the current US Congress is cool to any kind of free trade agreement (FTA) at this time.

“I think that the US is open to that one (GSP renewal), and that requires obviously a Congressional act… That’s why this visit of our economic team, and of course, hopefully, a presidential visit will emphasize the importance of our economic ties with the United States. That would probably put a little more emphasis on the GSP,” Mr. Romualdez said in an interview at the Philippine embassy in Washington, D.C. last week.

“We’re working on the GSP as a priority, and the FTA will be a continuing effort on our part to see how we get one done.”

The Philippines has been pushing for the reauthorization of its GSP eligibility after it expired in 2020. The program allowed duty-free entry of more than 5,000 Philippine products into the US, including electronics and agricultural products.

Also, Mr. Romualdez said the Philippines will continue pushing for a bilateral FTA with the United States, even though he called it a “big challenge.”

“There are many American companies who actually wanted this, and they told President Marcos this when he met with them in New York last September,” he said.

“But the problem is, the FTA is going to be approved by the US Congress and there seems to be very little appetite for any kind of FTA at this time. Even the Executive branch of the US government is not very optimistic that it can be done. It may take some time.”

US Trade Representative (USTR) Katherine Tai on Tuesday told Manila-based journalists that the US government is currently not keen on negotiating FTAs with its trading partners including the Philippines. 

Trade Secretary Alfredo E. Pascual on Wednesday said this would not prevent the Philippines from continuing to pursue an FTA with the US.

“The important thing is we’re not closing the door to formalizing trade relations between the Philippines and the United States,” Mr. Pascual told reporters on the sidelines of a forum in Taguig City.

He noted Ms. Tai was just echoing the position previously made by US President Joseph R. Biden, Jr.   

“Ms. Tai cannot say otherwise because President (Biden) has already made the pronouncement that there would be no FTAs during his term. She is just voicing that, and we understand. We had a discussion on this and we understand where she is coming from. But it cannot prevent us from further pushing,” Mr. Pascual said. 

As an alternative to FTAs, the US is pushing for the Indo-Pacific Economic Framework for Prosperity (IPEF). But the US-led trade framework would focus on wider trade agreements with multiple countries.

“Clearly, what [the US] wants to do is to have a wider reach rather than just one [country]. But obviously the Philippines wants to have a special arrangement like what [we have in other countries],” Mr. Romualdez said.

Launched in May 2022, the IPEF pushes for resilience, sustainability, inclusiveness, economic growth, fairness, and competitiveness among the 14 participating nations. This includes the US, Australia, Brunei, Fiji, India, Indonesia, Japan, South Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand, and Vietnam.

Mr. Pascual said the IPEF is not a trade agreement, but it will address some constraints.

“It is IPEF that we will use as a platform to work on this formal trade relations between the Philippines and the US because the US has initiated the IPEF to improve the trade environment,” he said.

For Mr. Romualdez, the Philippine government should also pursue other FTAs with other countries.

“Personally, and this is what I told our economic team, I think that we should try to work more on developing an FTA with other countries that will have an opportunity for us to increase our exports to these areas, rather than really just look at the United States,” he said.

The Philippines and Japan entered into an FTA in 2008. The Philippines is also part of the China-led Regional Comprehensive Economic Partnership (RCEP).

Mr. Romualdez said the country has to balance its relationship with the US and China amid trade tensions between the world’s two largest economies.

“This is where the thin line that we have to work on because we want to have a bigger trading partnership with China, because they are a big market. At the same time, their products are also acceptable to us. So, this is really a very challenging situation for us,” Mr. Romualdez said.

He said the Philippines can expand its exports to the United States by ensuring its products are competitive.

“If we can have the right kind of products that Americans would love to have, like for instance, food items that are popular, it’s a big market (350 million),” the ambassador said. — with Revin Mikhael D. Ochave