THE PHILIPPINES and India are considering a bilateral preferential trade agreement (PTA), which the Trade department said will diversify the base of Philippine export products shipped to the region.
Both countries have agreed to a “manageable” bilateral approach, the Department of Trade and Industry said in a statement Wednesday.
India withdrew from the 15-country Regional Comprehensive Economic Partnership (RCEP), a potential trade pact between all 10 ASEAN countries and major trade partners Australia, China, New Zealand, Japan, and South Korea.
India opted out due to concerns about the deal’s potential repercussions on its farmers and small businesses.
A preferential trade agreement reduces tariffs for a particular set of products.
“A more focused approach like a PTA is more practical. (The Philippines) is eager to conclude one with India not only to improve current trade levels in terms of value and volume but also in the breadth of products to be covered as current trade is highly concentrated on a few products,” Trade Undersecretary Ceferino S. Rodolfo said during a joint trade and investment working group conference on Sept. 17.
India Ministry of Commerce Joint Secretary Anant Swarup called on both parties to engage in consultations ahead of negotiations.
India was the Philippines’ 11th largest source of imports in 2019, with imports worth $1.7 billion accounting for 1.6% of the total. It was the Philippines’ 17th largest export destination with $534 million accounting for 0.8% of the value of total Philippine exports.
Trade Assistant Secretary Allan B. Gepty said a trade agreement could address supply chain gaps by improving market access for raw materials.
The Philippines has committed to signing the RCEP by November. — Jenina P. Ibañez