Local exporters are eyeing to increase their exports to Canada, especially as the Philippines and other Southeast Asian countries have launched the negotiations for a deal with Canada that is expected to boost trade relations and recover from the pandemic.
“This is an opportune time indeed to negotiate a trade deal with Canada which is looking for new markets and supply of intermediate goods,” Philippine Ambassador to Canada Rodolfo Robles said in a recent business forum.
Robles said the envisioned free trade agreement (FTA) between the Association of Southeast Asian Nations (ASEAN) and Canada is expected to be modern and comprehensive, and will take into account emerging trade realities, the potentials of ecommerce, the role of micro, small and medium enterprises (MSMEs), and the deepening value chains.
He said the ASEAN-Canada FTA is seen to increase Philippine gross domestic product (GDP) by almost $2 billion annually, exports expand by about $37.9 million, and services to Canada by $57.5 million.
“Aside from the GDP and trade, the investment side of the equation will likewise gain –it will complement the country’s “Build, Build, Build” program as well as the government’s 10-point socio-economic agenda. Among other objectives, it will improve competitiveness and ease of doing business. It will promote rural and value chain development and will accelerate investment in infrastructure while promoting science and technology,” he added.
But Robles said that in any trade agreements, some industries will gain while others lose.
“The real challenge is to identify the sectors and provide them with assistance until they are able to find new business models that will work to their advantage. Trade creates wealth and expand(s) economies through specialization,” he added.
Canadian Ambassador to the Philippines Peter MacArthur said the Philippines is Canada’s fifth largest non-FTA trading partner.
In 2019, the Philippines exports to Canada reached $1.2 billion, while its imports from Canada was $548 million, he said.
MacArthur said Philippine main exports to Canada include auto parts, information and communications technology, appliances, and agricultural products such as coconut.
“Your country has a trade surplus and enjoyed a trade surplus most years with my country that includes services trade,” MacArthur said, noting that Canada is the Philippine seventh largest source of foreign tourists and remittances from overseas Filipino workers in Canada.
“It was a healthy business but it is not at full potential, there is much room to grow,” he added.
MacArthur said the ASEAN-Canada FTA will increase Philippine manufactured exports and services exports to Canada.
“Tourism needs a boost these days as we pull out of this pandemic,” he said, adding an FTA is an “important element of the recipe to build back better, to recover (from) the pandemic by opening up the economy in tandem with important economic reform legislations going through the Congress.”
Canadian Chamber of Commerce of the Philippines (CanCham) president Julian Payne said demand by Canada for imports is growing, including for the type of products that the Philippines exports, such as agri-food and electronics.
“As the two countries recover from downturns due (to) the pandemic, there will be opportunities for increased Philippines exports to Canada. When a free trade agreement is entered into by the Philippines and also includes Canada, Canada exports will become more competitive with those from other countries already in (the) free trade agreement that covers Canada, such as the Comprehensive Progressive Trans Pacific Partnership (CPTPP),” he said.
The CPTPP is a comprehensive network of bilateral and regional trade agreements among its member economies: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam.
Its membership could expand with countries such as China and the United Kingdom (UK) expressing interest to join. In February 2021, the UK requested accession and four months later, the CPTPP Commission agreed to formally commence accession negotiations.
Meanwhile, Senior Trade Commissioner of the Embassy of Canada Guy Boileau said the potential FTA with the Philippines can reduce or eliminate tariffs on products exported to Canada, such as coconut oil, articles of leather, and appliances.
Boileau said a potential FTA can boost bilateral trade, services and investments between Canada and the Philippines, at the same time cooperation between the two countries.
He added it also allows the two countries to “share information, share expertise and address irritants before they might even become possible disputes. And we talk about services. Services is a huge area of opportunities, as well as on the investment side.”