Negotiators are hoping to “substantially conclude” this year talks on the ASEAN-Canada Free Trade Agreement (ACAFTA), the signing of which is seen to improve companies’ access to the ASEAN and Canadian markets, said the Department of Trade and Industry (DTI).
As such, the DTI and Tariff Commission (TC) in a recent virtual public consultation called for position papers on the participation of the Philippines in the ongoing ACAFTA negotiations, which cover products under Chapters 1 to 97 of the ASEAN Harmonized Tariff Nomenclature.
Position papers with stakeholders’ comments and concerns will be accepted until May 14, 2025.
In her update at the consultation, Marie Sherylyn Aquia, director of DTI-Bureau of International Trade Relations, said negotiators are aiming to “substantially conclude the negotiations by 2025.”
However, she also admitted that “there are ongoing deliberations about whether an extension will be needed to resolve remaining issues and ensure a comprehensive agreement.”
This as “there has been no substantial conclusion on all the chapters of the agreement, with certain areas still requiring further clarification and alignment among all the parties,” Aquia said.
She continued that there are three more rounds of negotiations in 2025 on market access offers on trade in goods, trade in services, and investments.
She said the market offers are expected to be presented by the second quarter of 2025, “which should allow both sides to propose tariff reductions, market openings and other trade benefits for key sectors.”
During this year, “negotiators are aiming to finalize all the key issues to bring the agreement closer to completion,” said Aquia.
“The progress has been slow but the momentum has been picking up. Hence there is a movement to soon exchange on the market access offers… as we substantially conclude the negotiations this year,” she stated.
Another speaker, Denise Cheska Enriquez, DTI chief for regional relations and arrangements, said that under the market access negotiations for trade in goods, the Philippines will be offering Canada elimination of tariffs, reduction of tariffs, and exclusion of tariffs.
On the other hand, the Philippines will request the elimination of tariffs and exclusion of tariffs, since these are the only kinds of offers Canada provides, Enriquez said.
Excluding tariffs means not applying a tariff on specific imports, while eliminating tariffs means removing tariffs entirely for a certain product or range of products. Exclusion focuses on specific exemptions, whereas elimination aims for broader trade liberalization.
Enriquez noted that there are 1,055 tariff lines of Philippine exports to Canada that are levied tariffs.
Nineteen areas are covered under the ACAFTA negotiations. These are trade in goods; trade remedies; sanitary and phytosanitary measures; telecommunications services; investment; intellectual property; competition; government procurement; standards, technical regulations and conformity assessment procedures; rules of origin; customs procedure and trade facilitation; trade in services; financial services; economic and technical cooperation; e-commerce; legal and institutional issues; micro, small and medium enterprises; good regulatory practices; and the newly added trade and sustainable development.
ASEAN and Canada expect that the successful conclusion of ACAFTA negotiations will strengthen ASEAN-Canada economic relations, connect ASEAN and Canada closer to the global value chains, and improve market access for both ASEAN and Canadian private sectors.
According to ASEAN Secretariat statistics, merchandise trade between ASEAN and Canada reached US$28.7 billion in 2023, while foreign direct investment inflow from Canada to ASEAN reached a total of $25.9 billion in the same year.
The top five ASEAN exporters to Canada in 2021 were Vietnam, Thailand, Malaysia, Indonesia, and Cambodia. The Philippines came in sixth.
The top exports from Philippines to Canada were insulated wire ($227M), gold ($185M), and integrated circuits ($138M). On the other hand, the top exports from Canada to Philippines were pig meat ($186M), wheat ($171M), and copper ore ($143M) based on statistics from tradingeconomics.com.
For the Philippines, it is hoped the ACAFTA will facilitate economic growth, attract more investments from Canada, improve Philippine share in Canadian import markets, and indefinitely maintain concessions received by the Philippines through Canada’s General Preferential Tariff scheme.
On expectations of facilitating economic growth, Aquia said: “Based on the results of the joint feasibility study, there will be an increase in Philippine GDP by 2.63% resulting from the improved market access in trade in goods, the reduction in the non-tariff measures, and improvements in trade facilitation.”
Enriquez said DTI is asking stakeholders for comments and inputs to this question: What are your trading interests and concerns in the area of trade in goods vis-à-vis Canada under an ASEAN-Canada FTA?
Position papers may be submitted until May 14 to the Tariff Commission at TC.Assist@mail.tariffcommission.gov.ph or Records@tariffcommission.gov.ph.
