The Philippines could gain access to lower tariffs and secure a bigger role in global supply chains if it gains a seat in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP).

However, the government must push for reforms to boost domestic firms’ competitiveness and lower logistics costs to ensure local firms can compete globally, they said.

Former Tariff Commissioner George N. Manzano said the Philippines would gain much-needed predictability in trading rules by joining the CPTPP as geopolitical tensions stress the need for market diversification.

“A rules-based trading arrangement gives businesses more confidence to invest, build long-term supply chains, and expand production,” he told BusinessWorld in a Viber message.

Being part of the CPTPP would also help the Philippines attract more foreign direct investment and could deepen its participation in regional and global value chains, Mr. Manzano said.

The 12-country CPTPP is composed of Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam, and the UK. The trade pact represents a combined population of over 500 million and a gross domestic product of $13.5 trillion.

The parties to the CPTPP last week agreed to begin preparatory talks for accession of the Philippines, the United Arab Emirates (UAE), and Indonesia into the trade bloc.

“We’ve strongly supported the Philippines’ application. If the Philippines completes the process and joins the agreement, businesses in our countries would benefit from lower tariffs, simpler trading rules, and stronger supply chains,” UK Deputy Trade Commissioner for Asia-Pacific (Southeast Asia) Rhiannon Harries was quoted as saying in a statement released by the British Embassy Manila on Tuesday.

The CPTPP earlier said the Philippines, the UAE, and Indonesia align with the Auckland Principles or the criteria used by the bloc to evaluate applicant countries.

The preparatory discussions seek to advance engagement and understanding between the Philippines and the CPTPP parties on the agreement’s standards. However, the talks do not guarantee accession or the launch of formal negotiations.

“The UK looks forward to working together with CPTPP Parties and the Philippines through this process,” British Ambassador to the Philippines Sarah Hulton said in a statement.

As global trade grows more uncertain, the Philippines is pursuing entry into the trade bloc to expand market access and reduce trade barriers. As part of CPTPP, the Philippines would be able to access one of the world’s most comprehensive trade networks, potentially benefiting from lower tariffs and streamlined trade rules across different markets.

Management Association of the Philippines President Donald Patrick L. Lim said the Philippines must keep up with its regional neighbors in improving cross-border trade through agreements like the CPTPP.

“As our ASEAN (Association of Southeast Asian Nations) neighbors deepen their trade integration, the Philippines must remain competitive in attracting investments and expanding export opportunities,” he said in a Viber message.

However, the Philippines must implement domestic reforms to reduce trade barriers to meet the CPTPP’s entry standards and ensure that local industries are not left behind, experts said.

“The CPTPP is a high-standard agreement that goes beyond tariff reduction and has beyond-the-border commitments. Complying with these obligations will require domestic policy reforms and stronger institutional capacity,” Mr. Manzano noted.

To ensure that domestic firms can compete in export markets, Mr. Lim cited the need to improve the ease of doing business, upgrade infrastructure, lower logistics costs, support digitalization, and upskill the local workforce.

“Trade agreements like the CPTPP create opportunities, but our businesses must be equipped to take advantage of them,” he said.

Jonathan L. Ravelas, a senior adviser at Reyes Tacandong & Co., said there is a need to reduce export costs and modernize the agriculture sector to ensure that domestic firms are export-ready.

“Without stronger competitiveness — better logistics, infrastructure, and ease of doing business — we could see imports rise faster than exports, putting pressure on local industries, particularly agriculture and small and medium enterprises,” he said in a Viber message.

Philippine membership in the CPTPP could encourage more British firms to invest and trade in the Philippines and across Southeast Asia, British Chamber of Commerce Philippines Executive Director and Vice Chairman Chris Nelson said.

“If the Philippines gains access to the CPTPP, this actually broadens out opportunities for companies that we are seeking to try to come to the Philippines and in Southeast Asia,” he said via telephone.

See original article here.