THE Department of Trade and Industry (DTI) signed two economic instruments on Wednesday updating free trade agreements (FTAs) with ASEAN, Australia, New Zealand and Hong Kong.
In a statement, the DTI said that it signed the Second Protocol for the ASEAN-Australia New Zealand FTA (AANZFTA), after the original FTA and the First Protocol were signed in February 2009 and August 2014, respectively.
“The finalization of the Second Protocol to amend the AANZFTA represents another milestone in our work to further strengthen regional trade and investment flows between ASEAN, Australia, and New Zealand,” Trade Secretary Alfredo E. Pascual said.
“We want to ensure the agreement continues to benefit businesses and reinforce our strategic links in the region,” he added.
The new protocol contains chapters on government procurement, trade and sustainable development, and micro, small, and medium enterprises (MSMEs), with new rules added to the “Trade in Goods and Customs Procedure” chapters.
The new rules under the Trade in Goods and Customs Procedure include “facilitating trade of essential goods during humanitarian crises and addressing related issues on non-tariff measures.”
The Second Protocol also amended market access commitments to provide “greater stability” for businesses looking to invest in professional services, education, transportation, construction, tourism and banking services sectors in Australia and New Zealand.
Professional Services and Education Services Cooperation annexes of the FTA were also added to provide a framework for authorities in negotiating initiatives by allowing mutual recognition of educational qualifications, digital education, blended learning, and other forms of education delivery.
The signed Second Protocol also includes enhanced provisions on electronic payments, competition rules, and consumer protection, the DTI said.
“Our goal is to foster resilience and sustainability for the long term, facilitating the flow of goods and services, and attracting investments,” Mr. Pascual said.
“I am confident this agreement will contribute to a stable and predictable trade and investment regime as well as greater movement of skilled professionals in the region,” he added.
Meanwhile, the DTI also signed the First Protocol to amend the ASEAN-Hong Kong, China FTA (AHKFTA) which adopted more “liberal origin rules” to allow traders to benefit from the lower tariffs under the agreement.
According to the department, the new rules cover manufacturing products such as food preparations, polystyrene, jewelry, woven fabrics, and denim.
“We welcome signing the AHKFTA First Protocol to boost trade through simplified export requirements between ASEAN and Hong Kong [as] we recognize the developments in the global economy and the challenges that come with it,” Mr. Pascual said.
“It is also important that ASEAN and Hong Kong optimize their economic partnership anchored on a rule-based system,” he added.
AHKFTA came into force in 2019, calling for tariff reductions for traded goods, removal of restrictions on trade in services, longer stays for business travelers, and better investment protections.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said that the enhancements to the AANZFTA and AHKFTA will help both exporters and foreign investors by lowering overall costs.
“[This will] further enhance supply chain management between countries, especially on specific industries as may be requested by those respective industries to enhance trade and investment.” Mr. Ricafort said in a Viber message.
He said that the enhancements are based on what exporters and investors require to make the existing FTAs more responsive, effective and relevant.
He added that “there is already a need for the FTAs “to better adapt to the changing times and requirements of the respective economies in each FTA.”
Trade Undersecretary for International Trade Allan B. Gepty said that undertaking a general review of the AANZFTA every five years is part of the agreement.
“Review is really part of the agreement with the end view to improve the rules, and include new and emerging areas in trade and investments such as e-commerce, trade and sustainable development, and the need to integrate MSMEs to global trade or global value chain,” Mr. Gepty said in a Viber message.
“For AHKFTA, we just need to also improve product specific rules to simplify requirements in availing preferential market access under the said FTA,” he added.
According to the Philippine Statistics Authority, exports to Hong Kong totaled $8.84 billion last year, while imports amounted to $2.01 billion.
Exports to Australia totaled $561.8 million in 2023, while imports from Australia amounted to $3.5 billion. — Justine Irish D. Tabile
