U.S., Philippines Discuss Trade Issues, Potential FTA
A press release from the Office of the U.S. Trade Representative suggests that the U.S. wants to resolve several outstanding trade issues before it will seriously consider a potential free trade agreement with the Philippines.
After meeting with senior economic ministers, business leaders, and senators in the Philippines May 23, Deputy USTR Jeffrey Gerrish said the U.S. looks forward to “resolving outstanding issues and exploring the best arrangement for strengthening and expanding our trade relations.” According to USTR, Gerrish’s visit followed up on a November 2017 meeting between President Trump and Philippine President Rodrigo Duterte during which the U.S. “welcomed Philippine interest in deepening the bilateral trade relationship through consideration of a potential free trade agreement.” Future talks will take place under the bilateral trade and investment framework agreement.
USTR notes that the U.S. had trade deficits of $3.2 billion in goods and $3.5 billion in services with the Philippines in 2017. The goods trade deficit was up 71.3 percent from 2016 as exports grew 3.3 percent but imports jumped 15.8 percent. U.S. foreign direct investment in the Philippines was $5.9 billion in 2016, a 9.4 percent increase from 2015, and was led by manufacturing, non-bank holding companies, and wholesale trade.
Issues of concern regarding the Philippines included in USTR’s 2018 trade barriers report include sanitary and phytosanitary permits for agricultural products, approval requirements for imports of genetically engineered crops, high tariffs on finished automobiles and motorcycles, corruption and irregularities in customs processing, fiscal incentives for export-oriented investments, the continued availability of pirated and counterfeit goods, and significant restrictions on foreign investment.