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ACFTA Research

ACFTA Research . Presented by AFA For TAG. Research objectives. Analyze provisions and impact of ACFTA Examine implications of ACFTA Identify country’s defensive and offensive interests Develop an advocacy agenda

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ACFTA Research

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  1. ACFTA Research Presented by AFA For TAG

  2. Research objectives • Analyze provisions and impact of ACFTA • Examine implications of ACFTA • Identify country’s defensive and offensive interests • Develop an advocacy agenda --industry food security --agriculture livelihood security --services poverty alleviation • sustainable development

  3. coverage • History and rationale of ACFTA • Philippine economic relations with China • Projected impact on trade and investment policy • Actual and potential impact on industry, agri and services • Recommendations for a sustainable trade and investment policy

  4. methodology • Records review and secondary data gathering (July-January) • Industry case studies ( July-August) • Focus group discussions • Validation consultation with TAG members and partners

  5. Facilitating factors • Internet - easy access to a wide range of data • Groups already involved in trade advocacy re ACFTA

  6. Hindering factors • Difficulty in finding a common sched for FGD participants • Some of required data not immediately available • Some data available but in different timeframe • Not many groups are familiarwith terms of the agreements

  7. How these were resolved • On line and actual interviews • Use of proxy data • Reference on past positions of POs and NGOs

  8. Lessons learned • Better mechanism to entice attendance in FGDs • Have first a learning session on ACFTA among POs, NGOs and other stakeholders

  9. Main findings: China -Phils relations • Phils has positive non agri trade balance with China ( but observation is different ----smuggling?) --Phils main exports : electronic items (semi conductor devices, electrical and electronic machinery and parts, optical disk drives, cathodes) --Phils main imports from China: electronic items (Laptops, mobile phones, electrical wafers, discs, etc ) • Phils has negative agri trade balance with China --Agri imports: urea, apples, fertilizers, tobacco, mackerel, tomato paste,mandarin, garlic, chicken meat --Agri exports: coconut oil, bananas, abaca, tuna seaweeds, pineapples

  10. Main findings: Phils-china relations • Phils is second ( to Indonesia) highest recipient of Chinese FDIs (agri, mining, tourism, investments)

  11. Key Provisions of ACFTA • Agreement on Trade in Goods • Agreement on Services • Agreement on Investment

  12. Key provisions- Trade in Goods • Early harvest program:early reduction of tariffs(dessicated coco, bananas, pineapple, tuna, fish and seafood items, live animlas, milk and cream, cheese and other dairy products, animal hair, live plants, seeds and other planting materials • Normal Track: covers bulk of Phil products • Sensitive Track: longer tariff reduction period for 400 tariff lines • QRs and Non Tariff Barriers : Phils can maintain QRs on rice: WTO serves as chapeau • Safeguard measures: can only be used during transition period; no recourse for import surges • Rules of Origin: a product originates from a party

  13. Key provisions-Agreement on Services • Includes provisions covering four aspects of trade: cross border, consumption abroad, commercial presence, movement of natural persons • Market access: prohibits imposition of limitations on services • Policies that facilitate trade in services • No corresponding safeguards to address negative impact of opening up the services market

  14. Key provisions-agreement on investments • Does not extend to govt procurement and services related to govt work • Includes movable and immovable property; shares, stocks and debentures of juridical persons; IPRs; business concessions, claims to money • Operates on Most Favored Nation principle • Protection for foreign investors • Transfers and repatriation of profits

  15. Main analysis Price of Signing the ACFTA higher than potential prize from implementing the said agreement • Limited flexibility to manage tariff cuts in ACFTA • Safeguard provisions more inaccessible that in other FTAs and WTO • Phils lacks insti and technical capability to develop and enforce standards

  16. Possible impact NEGATIVELY TO IMPACT ON FOOD SECURITY, LIVELIHOOD SECURITY, HEALTH AND SAFETY OF CONSUMERS • Possible influx of cheap manufactured and agricultural goods endangers the livelihood of small agri producers and manufacturers • Possible winners: exporters of coco oil, bananas, abaca, tuna seaweeds and pineapples; semi-conductor industry and micro-assembly • Possible influx of faulty and unsafe products will endanger consumers’ health and safety • Possibly less agri lands for food security of Filipinos with increasing lease agreements in agri lands

  17. RECOMMENDATIONS • Renegotiate ACFTA to push for longer tariff liberalization period and flexibilities to manage tariff cuts • Renegotiate for safeguard mechanisms • Strengthen enforcement of SPS measures • Strengthen domestic laws in protecting stakeholders’ rights • Enforce consti provisions on land ownership of foreigners • Make local producers competitive with chinese counterparts

  18. Thank you

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