Finance secretary eyes free trade deal with US

FINANCE SECRETARY Ralph G. Recto is eyeing a free trade agreement (FTA) with the United States after meeting with US officials on Monday to discuss efforts to boost ties, according to his office.

They discussed efforts to “boost economic and investment cooperation between the Philippines and the US,” the agency said in a statement. “He also broached the potential of having an FTA with the US and further enhancing security and military ties between the two nations.”

The government of President Ferdinand R. Marcos, Jr. would seek to address investor concerns by improving the ease of doing business, Mr. Recto said in the statement, citing a push for lower corporate income tax under changes to the Corporate Recovery and Tax Incentives for Enterprises Act.

A House of Representatives committee last week endorsed to members the substitute bill that will also streamline the tax refund system for corporations.

“In response, US officials welcomed these developments and expressed optimism about further deepening partnership with the Philippines, pointing out that the country’s young, English-speaking population and strong macroeconomic fundamentals underscore its attractiveness as a viable investment destination,” the Finance department said.

“The US likewise expressed interest in helping the Philippines establish an investment mechanism to help the country screen foreign direct investments (FDI) for national security purposes,” it added.

Meanwhile, Trade Undersecretary Allan B. Gepty said negotiations for a free trade deal are welcome.

“The Philippines has been advocating an FTA with the US, which is one of our major trading and investment partners,” he said in a Viber message. “However, the US is not yet keen or open to the arrangement. We welcome any move that will lead to an eventual FTA.”

In April, US Trade Representative Katherine Tai said the US is not seeking any free trade agreements with the Philippines or any of its trading partners.

The Philippines has been pushing readmission into the US Generalized System of Preference program, which expired in 2020. Participation in the trade program requires the approval of the US Congress.

Calixto V. Chikiamco, Foundation for Economic Freedom president, said Mr. Recto’s proposal is a positive development but is not realistic.

“The US has been moving away from free trade agreements due to political pressure from US labor,” he said in a Viber message. “In fact, even the limited agreements under the Indo-Pacific Economic Cooperation haven’t gotten approval from the US Senate.”

“It would be better if the Philippines joined the Comprehensive and Progressive Agreement for Transpacific Partnership led by Japan,” he added.

Signed in 2018, the free trade deal includes Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam.

The Philippines should also forge free trade agreements with the EU and Canada, Mr. Chikiamco said. “The Philippines, however, should also develop its defense industries to take advantage of the increased defense spending of allies like the US, Japan, Australia and the EU.”

The Finance department said the US officials present at the meeting included Robert Kaproth, Treasury Department deputy assistant secretary for Asia; Treasury Financial Attaché to Southeast Asia Daniel Hall; and US Embassy Chargé d’affaires and Deputy Chief of Mission Robert Ewing.

It said a “high-level delegation” from the US would visit the Philippines in March to strengthen bilateral ties. – Luisa Maria Jacinta C. Jocson, Reporter