Trade negotiators aim to “substantially conclude” this year’s talks on the ASEAN-Canada Free Trade Agreement (ACAFTA), which will improve Philippine exporters’ access to the ASEAN and Canadian markets.
As such, the Department of Trade and Industry (DTI) and the Tariff Commission (TC) recently held a virtual public consultation and called for position papers on the ongoing ACAFTA discussions.
The ACAFTA negotiations represent a pivotal opportunity for the Philippines to deepen economic ties with Canada, enhance market access, and drive gross domestic product (GDP) growth.
While progress has been slow, the momentum is building, with critical market access offers expected in 2025. However, unresolved issues and the need for alignment among diverse parties may necessitate an extension. Stakeholder input will be crucial to shaping a balanced agreement that maximizes benefits for Philippine industries while addressing competitive pressures. By leveraging ACAFTA, the Philippines can strengthen its position in global value chains, attract Canadian investment, and boost its share of Canada’s import market.
Market access is a cornerstone of ACAFTA, with a specific focus on eliminating tariffs on certain products to encourage Canadian imports.
Currently, 1,055 lines of exports to Canada are subject to tariffs, highlighting the potential for significant trade benefits if these are reduced or eliminated.
Key exports to Canada are insulated wire worth an estimated $227 million annually; gold, $185 million; integrated circuits, $138 million while the Philippines imports from Canada pig meat, $186 million; wheat, $171 million, and copper ore, $143 million.
The Philippines seeks to leverage ACAFTA to maintain concessions under Canada’s General Preferential Tariff (GPT) scheme and expand market share in Canada, where it ranks sixth among Association of Southeast Asian Nations (ASEAN) exporters.
Marie Sherylyn Aquia, director of DTI-Bureau of International Trade Relations, said negotiators aim to “substantially conclude the negotiations by 2025.”
However, she also admitted that “there are ongoing deliberations about whether an extension will be needed to resolve remaining issues and ensure a comprehensive agreement.” “There has been no substantial conclusion on all the chapters of the agreement, with certain areas still requiring further clarification and alignment among all the parties,” Aquia said.
There are three more rounds of negotiations in 2025 for the deal on market access offers on trade in goods, trade in services and investments.
She said the market offers are expected to be presented by the second quarter of 2025, “which should allow both sides to propose tariff reductions, market openings and other trade benefits for key sectors.”
During this year, “negotiators are aiming to finalize all the key issues to bring the agreement closer to completion,” Aquia said.
“The progress has been slow but the momentum has been picking up. Hence there is a movement to soon exchange on the market access offers… as we substantially conclude the negotiations this year,” she stated.
Denise Cheska Enriquez, DTI chief for regional relations and arrangements, said that under the market access negotiations for trade in goods, the Philippines will offer Canada the elimination, reduction, or exclusion of tariffs.
On the other hand, Enriquez said the Philippines will request the elimination and exclusion of tariffs since these are the only kinds of offers Canada provides.
Excluding tariffs means not applying a tariff on specific imports, while eliminating tariffs means removing tariffs entirely for a certain product or range of products. Exclusion focuses on specific exemptions, whereas elimination aims for broader trade liberalization.