HB 318 – An Act Creating the Philippine Trade Representative Office (Explanatory Note)

CONGRESS OF THE PHILIPPINES )
14th CONGRESS )
First Regular Session )

 

HOUSE OF REPRESENTATIVES
House Bill No. 318

 

Introduced by Representative Lorenzo R. Tañada III

 


EXPLANATORY NOTE

The Philippine economic development and trajectory continues to be a paradox. Compared to its Asian neighbors, it is endowed by a lot of natural resources, a highly literate population and creative people.


It was one of the first to accede to the GATT-WTO Uruguay Round Agreement in 1994 and quickly lowered its tariff way below its WTO commitments. The Philippine market is now known to be one of the most open in the world, outranking
Thailand and Indonesia in the Kearney Globalization Index of 2004. The rationale behind the drive for greater openness is the belief that doing so will pave the way for quicker economic development.


Yet, looking around, the
Philippines is a laggard in terms of economic growth. Investments are much less than what our neighbors generate. Vietnam, which has yet to fully join the WTO, is actually attracting more foreign investments and has dramatically reduced poverty over the last decade.


Apart from our commitments to the World Trade Organization, greater opening of our markets has happened with our membership in APEC, AFTA and numerous bilateral and investment agreements that government has entered into.


At the moment, a bilateral trade agreement with
Japan is awaiting the Senate’s ratification process while that of the US appears to be in the drawing board. We have finished the ASEAN-China and the ASEAN-Korea free trade agreements (FTAs). The combined impact of all these agreements is yet to be appreciated as there is no singular entity principally responsible for monitoring and more importantly maintaining a cohesive and coherent trade policy vis-a-vis our national interest.


What is existing is an ad-hoc set-up called the Tariff and Related Matters Committee (TRMC) created by Section 6 of Executive Order No. 230, series of 1987, tasked to coordinate agency positions and recommend national positions for international and economic negotiations. This is composed of several line agencies and ad hoc committees with overlapping functions and responsibilities.


The TRMC has a Technical Committee composed of different line agencies which handles trade and investment agreements among others. It receives technical and administrative support from a NEDA-based secretariat. It has a separate Technical Committee on WTO Matters (TCWM), supported by the WTO Desk of the Bureau of International Trade Relations (BITR) of the DTI. The TCWM has a technical subcommittee on agriculture, industry, services and other rules, which are headed by the Department of Agriculture, Department of Trade and Industry-Board of Investments, NEDA, and DTI respectively.


The TRMC has no jurisdiction over ASEAN and APEC matters, which are handled by the Philippine Council on ASEAN and APEC Cooperation.


To be blunt, our trade negotiations work can be likened to an orchestra, each unit playing its own instrument but with no maestro wielding a baton that is tasked to harmonize everything into a symphony.

It is no wonder then that it is difficult to pinpoint who or which agency is directly responsible for the promises that our joining the WTO, for instance, has failed to deliver.


Our trade negotiators are not at all full-time trade negotiators but professional bureaucrats from different line agencies that handle other work as well. To quote DA Undersecretary Segfredo Serrano, “Trade negotiations take up only 20 percent of our workload, 80 percent is devoted for other things that our policy and planning unit is tasked to do.”


Finally, there are no mechanisms in place to ensure transparency in the negotiations process as well as stakeholder consultation and participation in the crafting of all these agreements when their very livelihoods are at stake. This cannot go on.


To establish coherence, greater predictability, accountability and transparency in trade and investment policy making and to ensure that we have a cadre of trade negotiators with good institutional memory, the creation of a Philippine Trade Representative Office is being proposed.


It shall be under the Office of the President. As the country’s chief trade negotiator, the Philippine Trade Representative shall coordinate all trade-related policies, serve as the country’s lead negotiator in international trade matters, and ensure the development, implementation and administration of Philippine trade policy. A very important principle by which this Office shall operate is that of meaningful consultation with affected sectors, be it industry or agriculture and their representation in trade negotiations.


There is no doubt that trade and investments, when conducted within the framework of a clear development agenda, can contribute to employment creation and poverty alleviation. Other countries have done it without changing their Constitution just to accommodate the demands of foreigners for greater openness. That we forego ownership requirements of companies in key sectors of the economy and give them the right to own land goes beyond trade agreements and is practically giving up our patrimony. Indeed, we have yet to explore what it is like to be aggressive in our trade and investment negotiating strategy.


Time is not on our side as the globalization train will not stop on its tracks. Even if there was a temporary halt in the Doha Development Agenda of the WTO negotiations, there are regional and bilateral agreements that are in the works. Perhaps the creation of a Philippine Trade Representative Office should have been done a long time ago. But it is never too late to do it now.


Immediate passage of this bill is therefore earnestly sought
.


HON. LORENZO R. TAÑADA III
Representative
4th District, Quezon

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