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DTI pushes for GSP renewal, FTA for stronger US ties

Louella Desiderio (The Philippine Star) - June 24, 2021 - 12:00am

MANILA, Philippines — The Department of Trade and Industry (DTI) is pushing to strengthen ties with the US through the renewal of the Generalized System of Preferences (GSP) and the forging of a free trade agreement (FTA).

Speaking at the Philippines-US Business Dialogue held Tuesday, Trade Secretary Ramon Lopez said the renewal of the US GSP which expired on Dec. 31 last year is under discussion.

“But we hope to strengthen our relationship beyond the GSP and graduate toward an FTA that would provide a long-term, rules- based, and predictable trade environment for our two nations,” he said.

The US GSP allowed duty-free treatment for products coming from beneficiary countries like the Philippines.

Lopez said the US remains an important trading partner and investment source for the Philippines particularly in the areas of electronics, transport and storage, administrative and support services, manufacturing, real estate and information technology - business process management.

Diane Farrell, acting undersecretary for international trade at the US Department of Commerce, said the US government is committed to continue working with the Philippines and helping American firms to export their products and do business in the country.

“We look at the long term opportunities, especially the goals that the Philippine government has set out when we talk about transportation, when we talk about digital modernization, when we talk about health technology, as well as many other sectors,” she said.

She said other areas seen to offer opportunities for both countries are in infrastructure, as well as digital and telecommunication services.

While an FTA is not yet in place, Charles Freeman, senior vice president for Asia at the US Chamber of Commerce, said the group sees opportunity for the US and the Philippines to have a stand-alone agreement similar to what the US has entered into with Japan on digital trade.

“I think there is real congruency in the way that our businesses approach digital issues and really think to set the stage for what would be a win not just for technology companies but really for the people,” he said.

In addition, he said the group wants to encourage the Philippines to increase its exports to the US.

As both countries are working on building back their economies from the impact of the pandemic, Lopez said the Philippine government is committed to help US firms investing in the country to achieve their business goals and growth.

He said the government recently enacted the Corporate Recovery and Tax Incentives for Enterprises Act which reduced the corporate income tax rate and modernized the incentives regime to make it more relevant to investors.

In addition, he said other major reforms on the easing of foreign equity restrictions on retail trade, public utilities and other sectors pending in Congress have been certified as urgent by the President for legislation.

Apart from the reforms, he said the Philippines has a rich pool of 49 million highly skilled, dedicated, and cost efficient manpower resource to support companies’ operations, and offers access to other markets through its European Union Generalized Scheme of Preferences Plus beneficiary status, as well as FTAs with other partners.

Trade Undersecretary Ceferino Rodolfo said American firms also need not worry about data privacy and intellectual property protection as the Philippine government gives utmost importance to these.

In the same event, American firms present in the Philippines such as On Semiconductor Corp. and Concentrix said the available talent pool and government support have helped the companies scale operations in the country.

On Semiconductor president Hassane El-Khoury said the highly trainable English-speaking workforce in the country is necessary to support the operations of the firm given the quick changes in technology and the need to adapt and ramp up new skill sets in the semiconductor industry.

“I see that as tremendous value with our local team. We can’t underscore the importance of that because it makes everything that I just mentioned available, but also the support that we get locally. PEZA (Philippine Economic Zone Authority) has been a great partner to understand how we all can contribute,” he said.

Concentrix president Chris Caldwell said the Philippine talent pool’s adaptability to learn has played an important role in the business process outsourcing firm’s operations in the country which now supports not just English, but many other languages from the Philippines.

Partnerships with US firms have also supported operations of Philippine companies like Jollibee Foods Corp. (JFC) and San Miguel Corp. (SMC)

JFC president Ernesto Tanmantiong said while the company has been successful in the US thanks to the strong Filipino community there, he said the partnerships with American suppliers have also been helpful.

“Through partnership also with our suppliers in the US, we are able to penetrate, not only cater to our local Filipinos in the US, but also started to crossover to mainstream markets. And as a result, we have been growing every year and for Jollibee brand alone today, we are targeting to achieve 500 stores in the next five to seven years,” he said.

He said JFC has over 500 stores in the US across six brands: Coffee Bean and Tea Leaf, Smashburger, and Tortazo, on top of Philippine brands Jollibee, Chowking and Red Ribbon.

SMC president Ramon Ang said the diversified conglomerate has been working with American firms for its business operations.

“From our food and beverage business to power to petrochemical and our infrastructure business, we rely highly on American technology. American technology is really the most reliable and simplest to deal with,” he said.

Philippine Ambassador to the US Jose Manuel Romualdez said the American firms that have been operating in the Philippines and Filipino companies that have expanded in the US serve as proof on what the country can offer.

“We are continuing to promote business in the Philippines. It is a great place to have business. We are right in the center of Asia and we can see recovery after the pandemic is much more than we ever expected. It is happening now in the US as they control the pandemic. And I am sure in the coming years, we will see a rebound, a greater rebound in the economy,” he said.

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