^

Opinion

Boosting economic recovery together

DIPLOMATIC POUCH - Peter Macarthur - The Philippine Star

Canada and the Philippines can together boost economic recovery in the post-pandemic future that happily now beckons. While Congress has acted effectively to pass important economic reform legislation such as CREATE, an amended Public Service Act and other policies to help bounce back better, more can be done. Final ratification of the RCEP agreement would set the stage for further market access improvements with leading APEC member-economies such as Canada, thereby encouraging our business communities to grow and prosper. Canada is poised to play a role in economic recovery through the encouragement of free and inclusive trade which would attract more job-creating foreign investment in high potential sectors such as renewable energy, mining, the creative industries and digital services.

Last November, ASEAN and Canada agreed to launch free trade agreement negotiations. A joint feasibility study on a possible FTA forecasts that by opening up our economies, the Philippines’ GDP would gain a 2.6 percent boost of $7.5 billion. Such a business expansion would be generated by an 8.8 percent increase of $3.6 million in Philippines’ primary exports led by wood and metals and a 35 percent jump in manufacturing exports of $378 million – led by apparel, chemicals, rubber and plastics.

The study forecasts that Philippines services exports to Canada in areas such as aviation, tourism and shipping would rise 9.6 percent or $57.5 million. Canada is a top ten source of tourists to the Philippines. Examples of high potential gains for the Philippines through single and double-digit tariff elimination include the following: tires, coconut oil, leather products, apparel, footwear; rubber products, wood furniture and jewelry.

An FTA would signal to business communities in Canada and around the world that the Philippines is “open for business” at a time when global supply and value chains are shortening to become more regional and as the Philippines seeks to gain from the shift of foreign direct investment from China to Southeast Asia. Diversification by the Philippines with foreign companies could represent a win-win. Such an FTA would help the Philippines diversify economically more from China and the rest of Asia to the Americas.

Canada is the world’s tenth largest economy, is fully integrated into North American supply chains, is a leader in green sustainable development, features some of the world’s ten largest institutional investors (led by pension funds) and is among the world’s leaders in the successful implementation of public-private partnerships to build infrastructure. Canada has a proven record in negotiating inclusive free trade agreements that deliver benefits – it is the only G7 country today enjoying free trade with all other G7 countries. Canada has FTAs with more than 50 countries, which includes a modernized FTA with the United States and Mexico that came into effect in 2020. An FTA with Canada could help the Philippines set the stage for other FTAs with the Americas.

Our FTAs have evolved in a way to reflect news ways of doing business in the 21st century. This includes facilitating inclusive economic growth and trade opportunities through the use of the internet and address potential barriers to digital trade. Such advancements would stimulate the digital services sector, including existing Canadian BPO and financial services firms operating in the Philippines, aided by facilitation of personnel movement across borders. An FTA would support predictable and transparent intellectual property protection, which would boost the creative industries sector including animation and gaming, arts and entertainment, software and design.

Canada would also seek commitments in the area of the environment and labor issues, as well as promote a corporate social responsibility approach by extractive industries, particularly mining exploration, production and processing, which could return as an important employer and foreign exchange earner for the Philippines. The Canadian Mining Association’s Towards Sustainable Mining (TSM) protocols are now being observed by the Chamber of Mines of the Philippines after years of sharing such best practices and helping to train independent auditors.

In summary, the facilitation of inclusive trade in goods and services alongside investment both ways would increase economic activity, create jobs, generate profit and tax revenue and should be a vital ingredient in any post-pandemic economic recovery strategy. Such a pro-business posture would put the Philippines on a more even playing field with regional competitors such as Vietnam and Singapore, which already enjoy duty free access to the Canadian market through the Trans Pacific Partnership (CPTPP).  In the first year of the CPTPP governing trade and investment, Vietnam significantly increased exports to Canada. By the same token, Canada can be among the elements for optimal economic recovery by the Philippines in the years ahead.

There are over 1 million Filipinos in Canada. Canadian investors have been in the Philippines for over 100 years. Canadians are enjoying Jollibee chicken and other products (Jollibee just opened its 24th store in Canada) while Tim Horton’s has invested in restaurants in the Philippines. True, our commercial relationship is solid, but there is much more that we can do. There is room to grow and learn more about our capabilities. Smart cities infrastructure, climate-smart agriculture, education, green mining, clean technologies are areas where we can advance together.

One thing is certain, our Filipino friends can count on Canada as a trusted and long-term partner at a time when we are all working toward a healthier, greener and more sustainable economic recovery.

*      *      *

Peter MacArthur is Canada’s ambassador to the Philippines.

ECONOMY

Philstar
  • Latest
  • Trending
Latest
Are you sure you want to log out?
X
Login

Philstar.com is one of the most vibrant, opinionated, discerning communities of readers on cyberspace. With your meaningful insights, help shape the stories that can shape the country. Sign up now!

FORGOT PASSWORD?
SIGN IN
or sign in with