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Magnitude of Trade Relationship Underscores Close Ties Between the U.S. and Philippines
WTO Trade Policy Review of Philippines
March 20, 2012

Statement by the U.S. Representative


Thank you, Chair.

The United States warmly welcomes the delegation of the Philippines led by Undersecretary Cristobal of the Department of Trade and Industry, with representatives of other Philippine agencies, including Mr. Jose Victor Chan-Gonzaga, charge d’affaires of the Philippine Mission in Geneva and Undersecretary Serrano of the Department of Agriculture.  We also welcome the insightful comments of our discussant, Mr. Martin Glass of Hong Kong, China, which provide a good basis for today’s meeting.

The Philippines and the United States are strong allies and partners.  We share history, a common language, and extensive linkages between our peoples, including more than four million Filipinos and Filipino Americans living in the United States.  The magnitude of our trading relationship further underscores these close connections.  Our two-way trade has grown over the decades to $22 billion in 2011, comprising $17 billion in goods trade and $5 billion in services.  The Philippines is a leading beneficiary of our Generalized System of Preferences program, with roughly $1 billion of Philippine goods exports to the United States entering the U.S. market duty free every year.  Our two-way investment stock is roughly $7 billion.

There is no better symbol of our close, long-standing trade ties than the American Chamber of Commerce in Manila – the first U.S. Chamber of Commerce overseas, established in 1902 and incorporated in 1920, it has been active in fostering commercial linkages between our countries for more than one hundred years.  We are close partners in APEC and have a good dialogue with the Philippines, bilaterally and here at the WTO.  We are optimistic about the future direction of our engagement.

This TPR is taking place at an important time for the Philippines, with the government of President Aquino taking significant steps to fight corruption and create a strong foundation for expanded economic growth, including through the Aquino Government’s five-year Development Plan.  The United States recognizes the importance of these efforts, which have the potential to significantly enhance the economic performance of the Philippines and make it a more attractive place for trade and investment.  We hope this TPR will be useful to the Philippines as it plans and implements governance and policy reforms in key areas.

The investment climate promises to be a theme of our discussions today, as it was during the previous TPR.  The Government Report notes that it is now official policy to attract, promote, and welcome productive investments from abroad.  Yet, as the Secretariat Report notes, foreign investment restrictions remain extensive in the Philippines and inward foreign investment lags compared to that of other countries in the region.  Given the importance of foreign investment in energizing economic growth and creating jobs, we would be interested in hearing from the Philippines on its plans for further reform, including reduction of the Foreign Investment Negative List.  In particular, are there certain sectors where your government is considering further market opening in the near term?  The Government Report also notes that the Philippine government is leveraging public-private partnerships to enhance its attractiveness and competitiveness as an investment destination.  We would be very interested in learning more about the government’s efforts in this area.

We commend policy reforms being undertaken by the Philippines in the customs area.  For example, the Philippines has acceded to the revised Kyoto Convention.  Our two countries have agreed on a bilateral protocol with commitments on the transparent publication of customs regulations, the use of advance rulings, and increasing the de minimis level for express shipments.  The Philippines is demonstrating commitment and leadership in these efforts, which have great potential to streamline trade, reduce corruption, and improve customs collections.  During this review, we would welcome an update from the Philippine delegation on prospects for passage of the customs legislation currently before the Philippine Congress.

In the agriculture sector, the United States and the Philippines have a booming trade relationship.  Last year, Philippine exports of agricultural products to the United States exceeded $1.7 billion, covering a wide range of products including coconut oil, raw sugar, processed fruits, and tuna. Meanwhile, U.S. exports of agricultural products were $2.1 billion, up significantly from $800 million in 2005.  For some products, including food and beverages, the Philippines is our fastest growing market in Asia and one of the fastest growing in the world.  Our two countries have a shared interest in continuing our good work together to ensure a strong science-based foundation for our agricultural trade, for the benefit of consumers and exporters.  On meat handling, as you know, we continue to be very concerned about regulations that impose very rigorous requirements on certain kinds of meat that are primarily imported, but no requirements at all on freshly slaughtered domestic meat.  Such regulations are inconsistent with well-established science on food safety.  At the same time, we feel that we have made some progress in our bilateral discussions and hope that we will be able to fully resolve this issue as soon as possible so that imports of safe, high quality meat products from the United States and other countries are not disrupted.

On intellectual property rights, we remain concerned about weaknesses in the enforcement environment, including the very small number of convictions achieved in IPR cases in recent years. At the same time, we recognize the efforts of the Philippine Government to improve the situation, including through the issuance by the Philippine Supreme Court of new rules to improve the handling of IPR cases in the court system. In addition, we acknowledge progress made by the Philippine Government in reducing camcording piracy following the passage of an Anti-Camcording Law. These are important steps in the right direction. During this TPR, we would be interested in learning more about the Philippine Government’s plans to improve its IPR regime, including by passing the long-awaited copyright legislation currently before the Philippine Senate. After more than a decade in the legislative process, passage of this important legislation would send a strong signal that the Philippines is motivated to improve its IPR environment and join a growing number of countries in the region taking steps to nurture creativity and innovation.

Our two governments have for some time informally explored the possibility of the Philippines becoming a signatory to the WTO Agreement on Government Procurement.  In light of the benefits that could accrue to the Philippines from GPA membership, we strongly encourage the Philippines to join the WTO Agreement on Government Procurement.

Chair, we thank Undersecretary Cristobal and his delegation for their attention to our questions.  We look forward to closer cooperation with the Philippines here at the WTO, bilaterally, and in APEC.  We also look forward to continuing to work with the Philippines and other Members to strengthen the global economy and the rules-based multilateral trading system embodied by the WTO.

Thank you.