Philippines TPP Accession

Philippines TPP Accession

SPS, SOEs, Cooperation, Trade in Goods, and Trade in Services


Introduction

Accession to the Trans-Pacific Partnership Agreement (TPP) would implicate a series of necessary changes to the sanitary and phystosanitary (SPS) measures and state-owned enterprises (SOEs) of the Republic of the Philippines. The agreement would also offer some opportunities for cooperation and capacity building. Finally, the TPP would implicate the Philippines’ trade in goods and trade in services regulatory regimes.


Sanitary and Phytosanitary measures

SPS measures are laws that restriction international trade in order to protect human, animal or plant health. Under the Parties’ pre-existing WTO commitments, all SPS measures must be based on scientific information, including international scientific standards or an assessment of risk. Parties must also ensure that the measures do not arbitrarily or unjustifiably restrict international trade. The TPP does not alter these standards. However, the TPP creates new requirements to ensure that Parties’ adoption of SPS measures is efficient and transparent


State-Owned Enterprises

The SOE chapter of the TPP is inconsistent with the National Food Authority (NFA)'s current role in Philippine society. Contrary to the TPP, the NFA does not take commercial considerations into account in the purchase and sale of rice, discriminates in purchasing from foreign producers, provides noncommercial assistance to Philippine farmers, and sets import prices. To accede to the TPP, the Philippines must adapt the role that the NFA plays in Philippine society to the TPP guidelines or negotiate a carve-out from the majority of most SOE provisions.


Capacity Building

While the TPP does not guarantee cooperation and capacity building initiatives for its Parties, it does establish a framework and committee to regularly discuss such programs. Financial assistance is not guaranteed, and is unlikely absent negotiating assistance as a condition of accession. Finally, analysis of TPP accession should also take into account the several other international and governmental programs exist for cooperation and capacity building. 


Trade in Services

Obligations regarding cross-border trade in services, market access inscription procedure, and the impact on domestic regulation of cross-border trade in services are reviewed. Domestic regulatory regimes regarding investment, telecommunications, and financial services are analyzed and found to be largely in compliance with the TPP.


Trade Flows

Statistical analysis provided by the International Trade Commission on Philippine trade flows reveals that the Philippines could benefit most from tariff rate reductions in trade with Canada. Specifically, Canadian tariffs on clothing and agricultural products remain high. In return, the Philippines would likely be required to make cuts to its tariffs on raw materials, crops, and meat products. The Philippines already receives largely favorable tariff rates from the United States and Japan. However, the Philippines could benefit from rate reductions on exports of bananas to Japan, and exports of clothing to the United States.


Conclusions

Accession to the TPP could benefit the Philippines through increased trade flows as well as cooperation and capacity building opportunities. However, the TPP does present requirements that the Philippines would need to implement, regarding its NFA, SPS discipline, and domestic regulation concerning the cross-border trade in services. Finally, while the Philippines was not a founder of the plurilateral trade regime, it has opportunities to negotiate a tailored accession protocol to best account for its specific needs as an emerging economy.


The full report can be accessed and downloaded here: https://georgetown.box.com/s/6nqw1afgcdxoyr98togymj8wnixjjxvd