Trade Liberalization and the associated risks faced by domestic SMEs

1. YOUR EXPORT FITNESS PARTNER Trade Liberalization and the associated risks faced by domestic SMEs VENUS C. GENSON PhDCEO/President, Venus Group of CompaniesPresident, PHILEXPORT-Cebu

2. CURRENT SITUATION • Several bilateral and multilateral trade agreements have been signed among trading partners. • 2. The Philippines is one of the signatories of the ASEAN free trade agreement. It has 12 overall. • 3. The Philippines have also signed bilateral free trade agreements with its strategic neighbors like Japan, South Korea, Australia and New Zealand, and China. • 4. The Philippines is basically a consumer economy and not a producer economy, relying mostly on foreign workers’ remittances. • 5. The Philippines’ surplus in merchandise trade is barely 1% of Gross Domestic Product. • 6. The Philippines’ service sector contributes around 55% to GDP and employs roughly around 51% of the total work force.

3. Getting our Principles in place • National Interest is the primordial objective • Lock in benefits to: • Broaden our export base • Expand investment inflows • Protect the interest of our overseas workers and professionals • Position both offensive and defensive interests in key sectors in relation to their value chains • Transparent and expansive information and network to build our capacity to address gaps in emerging issues in trade such as Non tariff barriers, Intellectual Property Rights Administration, Trade Facilitation, Technology Transfer, Competition Policy and Development Aid

4. $ $ $ $ $ $ $ $ $ $ There are a lot of problems that can weaken a potentially strong business opportunity Huge Potential Benefits wrong set up Of business $ agree with over-conser-vative estimations bad identi-fication of gain areas no strong To-Be vision Weak Business Outcome not enough attention to adaptation insufficient research of potential market

5. Reasons for Participation in FTAs • Maintain • Competitiveness • Cross-border industrial • Complementation • Sustain inflows of investments • Mutual support on • issues of common • interest

6. Existing FTAs • ASEAN Free Trade Area ( AFTA) • ASEAN-China Free Trade Area (ACFTA) 3. ASEAN-Korea Free Trade Area (AKFTA) • ASEAN-Australia-New Zealand Free Trade Area (AANZFTA) • ASEAN-Japan Comprehensive Economic Partnership Agreement (AJCEPA) 6. Philippines-Japan Economic Partnership Agreement ( PJEPA) 7. ASEAN–India Free Trade Area (AIFTA)

7. OTHER CHALLENGES

8. POTENTIAL SOLUTIONS

9. Doing business with Australians • Meetings start on time – if you’re going to be late, let them know • Facilitation fees” are not normal – Australia has laws covering bribery of foreign officials • Australians will face issues “front-on” • Like to hear the “bad news” up-front so that they know where they stand • Like to have resolution • When issue is settled, the matter is dropped • Don’t normally carry a grudge

10. 谢谢 VENUS C. GENSON, PhD Email: venus_genson@yahoo.com www.art-n-nature.com; www.venuscrafts.com MARAMING SALAMAT THANK YOU! Shangri-la Hotel, Taipei August 17, 2011