Amb. Michael W. Michalak, senior vice-president and regional managing director US-ASEAN Business Council at the 9th Arangkada Philippines Forum 2020 on Foreign Investment in the Post-Pandemic Philippines, raised this option stressing that FTA negotiations with the US could be on hold and under review as the new administration of President Biden comes in.
Michalak said this may take time out as there also other considerations like the union leaders in the democratic party who have been somewhat skeptical about the value of this.
“Perhaps the Philippines could look at a sectoral agreement, which might at some point grow into an FTA,” said Michalak. President Donald Trump gave the go signal on the proposed PH-US FTA negotiation during his visit to Manila in 2017 to attend the APEC Leaders’ Summit.
While there is the likelihood of an FTA with the Philippines being put on hold pending the foreign policy review, he said, there is another potential strategy that may be of interest, and that is integration.
Thus, he urged the Philippines to take a leadership role in ASEAN by encouraging one or two other ASEAN member countries to work for an FTA with the US to make it more attractive. He noted that the Philippine Embassy in Washington led by Ambassador Jose Manuel Romualdez, who could build a successful and open relationship with the new US President and his team. He further said that the Philippines is a very popular trade partner of the US and has been received well at the Capitol Hill.
Aside from bilateral FTA, Michalak said there are other ways around to push for improved trade as he noted of the growing sentiment in the US Congress for Asia. “I know that the US is going to be looking to do more in Asia, particularly Southeast Asia. And I do believe that peace can play a large role in that,” he said.
With that, he urged the Philippines to also try “hybrid agreement.” He said the Philippines could set up a model agreement, “which does things in the digital space and does things in other sectors.” He said this can be a path the Philippines can stand and then others can join later when they feel ready.
He said this is one of the concepts behind the first Trans Pacific Partnership, which just died down because President Donald Trump did not like it.
Personally, he believes that the Biden administration offers more potential for multilateral or bilateral FTA because the new president is more international and more inclusive.
Given that America alone may not be sustainable, he said, these trade skeptics are also looking at constructive economic and social programs.
The new US administration will need to see increase market access for American firms as well as well-being of all participants in free trade by utilizing the multilateral trading system.
While there is no certainty that some of the leaders in the Biden government have been won over, but he said that there are certainly more chances for free trade and American support with a multilateral trading system now than at any time during the past four years.
“I believe this attitude will eventually help out all trading. Let’s get a little closer to this particular trading,” he added.
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