Policy Adjustments to Exploit Opportunities in WTO, APEC and AFTA: Tradable Goods Sector
Myrna S. Austria*
The fast economic integration of the world in the 1990s has revolutionized the conduct of business, here and abroad. The increasing free and open trade and investment has brought new players, new products and new technology into the market making competition more intense. In response to this development, the Philippines embarked on a clear-cut change in trade policy in the 1990s to enhance its competitiveness in the world market. This is shown by the country’s move towards a more uniform tariff rate and its commitments in multilateral and regional trading arrangements like the World Trade Organization (WTO), ASEAN Free Trade Area (AFTA) and the Asia-Pacific Economic Cooperation (APEC). Recent developments include the objective to fast-track certain liberalization efforts. This includes the Early Voluntary Sectoral Liberalization (EVSL) initiative under APEC and the Information Technology Agreement (ITA) under WTO. The objective of this paper is to analyze the implications of these recent trade policy developments and present a forward-looking approach on how best the business sector and the government can respond and adapt to these changes amidst the ongoing crisis in the region. The next section of the paper discusses the emerging Philippine trade environment, including the recent regional developments that are expected to affect Philippine trade. This is followed by an analysis of the overall trade performance and the performance of the sectors to be affected by the new agreements. The potential gains the emerging trading environment may bring to the country are then discussed. Finally, the action agenda for both the business sector and the government on how to optimize the potential gains are addressed. The Emerging Philippine Trade Environment The emerging Philippine trade environment is heavily influenced by the country’s unilateral trade policy reforms and commitments in various regional trading arrangements such as the WTO, AFTA and APEC.
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Research Fellow, Philippine Institute for Development Studies. The research assistance provided by May Coronado is gratefully acknowledged.