THE PHILIPPINES and the US should work on a standalone digital trade agreement that could serve as a model for the region, a US chamber of commerce official said.
Charles Freeman, senior vice-president for Asia of the US Chamber of Commerce, said that some issues remain unresolved for a US-Philippine free trade agreement.
“We’ve had this on again-off again conversation about whether the United States and the Philippines can enter into a free trade agreement. I think the politics of that still are unresolved,” he said.
But Mr. Freeman said at a virtual business dialogue on Tuesday that the two economies could enter a digital trade deal.
“There’s real congruency in the way that our businesses approach digital issues,” he said.
“I really think there’s an opportunity to set the stage for what would be a win not just for technology companies, but really for the people that put bread on the table every day in both the Philippines and the United States.”
The US and Japan in 2019 signed a digital trade agreement banning customs duties on electronically distributed digital products like e-books and videos and facilitating cross-border data transfer.
In the Philippines, restrictions on foreign participation have limited the country’s integration with digital trade networks in the Asia Pacific, a Philippine Institute for Development Studies study has found.
According to the report, the Philippines has a slightly restrictive policy and regulatory environment for digital trade as foreign equity limitations on electronic commerce and telecommunications dampen foreign participation. A digital infrastructure gap, the report added, also limits online transactions.
Meanwhile, Trade Undersecretary Ceferino S. Rodolfo said at the event that some US firms have been showing interest in the Philippines after a law cutting corporate income tax and reforming the tax incentives system was passed.
“We have seen strong interest coming mainly from, at this time, infrastructure-related companies,” he said, noting that there has been interest from the telecommunications, artificial intelligence, and data center sectors.
“There has been strong interest from highly innovative, labor-intensive companies in the electronics sector trying to look at the Philippines as an alternative or complementary location for their factories here in Asia,” Mr. Rodolfo added. — Jenina P. Ibañez