11/8/2015

ASEANopensuphalftheworldtoPHtrade

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ASEANopensuphalftheworldtoPHtrade
ASEAN,throughitsFreeTradeAgreementswithregionalpowers,givesthe
countrythechancetotradetohalftheworldatlittletonotariffs
ChrisSchnabel
@mickschnabel
Published11:11AM,June25,2015
Updated11:13AM,June25,2015

ASEAN+6.ByvirtueofitsmembershipinASEAN,thePhilippineshasfreetrade
accesstothemarketsofChina,India,Australia,JapanSouthKoreaandNew
Zealand
ASEAN+6.ByvirtueofitsmembershipinASEAN,thePhilippineshasfreetradeaccesstothemarketsof
China,India,Australia,JapanSouthKoreaandNewZealand

MANILA,Philippines
TheASEANEconomicCommunity(AEC)provides
unprecedentedaccesstotradingopportunitiesnotjustbetweenmemberpartners
butwithregionalcountriespowersaswell.
OnelittleappreciatedadvantageofbeingwiththeAECisthatitgrantsautomatic
accesstoalltheseothertradedialoguepartnerswhichareallmajoreconomies
saidCielitoHabito,headofUSAIDtraderelatedassistance,duringtheASEAN
EconomiccommunityforumjointlyheldbyGoNegosyoandtheAustralian
EmbassyinMakationWednesday,June24.

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ThePhilippineshasalreadyhadFreeTradeAgreements(FTAs)withthe9other
membersofASEANsince1992withtheestablishmentoftheASEANFreeTrade
Area,buttheASEANblochasalsonegotiatedfreetradeagreementswithSouth
Korea,Japan,Australia,NewZealand,ChinaandIndia.
TheFTAswiththese6nations,ineffect,turnamarketforfreetradewithzeroor
preferentialtradetariffsof628millionpeople,ASEANspopulation,intoamuch
widerregionalmarketofaround3.45billionpeople,roughlyhalftheworlds
population.
Tradeshiftingtowardstheeast
ASEANsindividualFTAswiththese6nationsarealreadybeginningtohavean
effectonthePhilippinestrade.
Alittleoveradecadeago60%ofthePhilippinestradewaswiththeUS,EUand
therestofthewest.Now,60%ofourtradeiswithASEANandAsia,shared
DepartmentofTradeandIndustry(DTI)IndustrialDevelopmentUndersecretary
AdrianCristobalJr.inhiskeynotespeechattheevent.
SincetheinceptionoftheASEANChinafreetradeagreementin2010,Philippine
exportstoChinarosefrom$5.7billion(P257billion)to$7billion(P315.8billion)
by2013.
AfactorinthishasbeenthegovernmentsactivepromotionoftheseFTAs,
Cristobalexplained.
In2010,werealizedthatnotmanyhaveheardaboutthesetradeagreements.It
waslikeawellkeptsecret,hesaid.
Inordertopromotethem,theDTIlaunchedaprogramthatsameyearcalled
"DoingBusinessinFreeTradeAreas"whichinvolvedorganizingseminars
coachingentrepreneursacrossthecountryonhowtomakethebestuseofthese
deals.
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IthasresultedinthePhilippineshavingthehighestincreaseinutilizingtheseFTAs
inASEANandearningthecountryaspecialmentioninASEANsecretariatreport
forpostingthehighestincreaseinutilizingtheASEANAustraliaandNewZealand
freetradeagreement,Cristobaladded.

NOFEAR.Dr.CielitoHabito,thecountry'sformerchiefofeconomicplanningunderFidelVRamos,
explainswhythePhilippineshasnothingtofearfromASEANintegration.PhotobyChrisSchnabel/

Rappler
HOWDOESTHISSTORYMAKEYOUFEEL?
TradeofficialsfromASEANandthe6countriesarealsocurrentlyintheprocessof
kcaB

pushingthisfurtherbycombiningthe6individualfreetradeagreementstocreate
justonesinglefreetradearea,Habitosaid.
Happy

Sad

Angry

Don'tCare

elpoeprehtoedamseirotsesehT
TheproposedRegionalComprehensiveEconomicPartnership(RCEP)wouldbe
!tuomehtkcehC
worldslargestfreetradearea,accountingforabout1/3oftheworldstotalgross
Inspired
Afraid
Amused Annoyed
domesticproduct(GDP).
Tradetalksaretargetedtobecompletedthisyearwiththe6thandmostrecent
meetingheldinFebruaryofthisyearinThailand.

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Complementingnotcompeting
Small,microandmediumenterprises(SMMEs)standtobenefitfromthismassive
tradeintegrationasglobaltradingpatternshaveshiftedtowardsintermediate
productsratherthancompletedgoods.
Whatisdrivingtradeworldwiderightnowisinvaluechains,productsbeing
completedstagebystageandfromcountrytocountrythingsthatarenotyet
finishedproductsbutwillbeturnedintocompletedproductssomewhereelse,
Habitosaid.
ThesearethekindofgoodsthatthePhilippinessuppliesalotof,suchascircuit
boardsandsemiconductors,headded.
Toillustratethis,hecitedthatthePhilippines'top3importsfromThailandare
motorvehicles,electronics,petroleum,andchemicals,whilethecountry'stop3
exportsaremotorvehicleparts,electronics,andminerals.
Wereimportingandexportingproductsthatarefromthesameindustriessoits
notcompetitivetrade,itscomplimentarytrade,anditsasimilarpatternwith
MalaysiaandSingapore,Habitosaid.
WhenyoulookattheAEC,heexplained,theopportunitieslieinparticipatingin
theseglobalvaluechains,anditismucheasierforasmallfirmtofocuson
producingcomponentsinthesechainsratherthancompletedproducts.
GUIDING.(LR)RamonLopez,executiveDirectorofthePhilippineCenterfor
Entrepreneurship,formerNEDAchiefDrCielitoHabito,andAustralianTrade
CommissionerAnthonyWeymouthgiveentrepreneursadviceonhowto
navigatetheAECattheASEANEconomicCommunityForum.PhotobyChris
Schnabel/Rappler
GUIDING.(LR)RamonLopez,executiveDirectorofthePhilippineCenterforEntrepreneurship,former
NEDAchiefDrCielitoHabito,andAustralianTradeCommissionerAnthonyWeymouthgive
entrepreneursadviceonhowtonavigatetheAECattheASEANEconomicCommunityForum.Photoby
ChrisSchnabel/Rappler
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Unduefear
AlotofpeopleareworriedaboutatsunamiofASEANmadeproductsfloodingthe
marketanddrowningdomesticproducerswhentheAECisformallyinstitutedon
December31,bringingwithita100%removaloftradebarriersbetweenASEAN
nations,Habitosaid.
Ineffect,AECisalreadyherewith99.6%ofalltarifflineshavingbeenremoved
withtheonlyremainingonesbeingriceandsugarduetopoliticalreasons,he
explained.
Thetariffshavebeenremovedsince2010,headded,andsincethenlocal
producershavemanagedjustfinesothereisnocausetoworry.
Whatwereallyneedisachangeinmindset,fromfearingthethreatstoseizingthe
opportunitiesthatAECpresents,hesaid.Rappler.com
(+6imagefromShutterstock)
$1=P45.12

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