A COMPREHENSIVE economic partnership agreement (CEPA) with Chile could create up to $9 million in expanded trade, the Department of Trade and Industry (DTI) said.
Bureau of International Trade Relations Director Marie Sherylyn D. Aquia said the findings from a joint study indicate that “Gains from combined trade creation and trade diversion may range from $7.9 million to $9 million,” she said in a Tariff Commission hearing on Friday.
“Based on the partial equilibrium analysis of the impact of such an agreement, total trade creation will amount to $3.9 million, mostly in electronics, and then total trade diversion will amount to $4.68 million; the shift from Chile’s other imports to the Philippines will mainly affect China, the US, Vietnam, Thailand, and Peru,” she added.
If realized, the CEPA will be the Philippines’ first free trade agreement (FTA) with a Latin American country.
She said that the Philippine and Chilean economies are complementary, with Chile offering resources and technology and expertise and the Philippines offering labor, services and access to the Association of Southeast Asian Nations.
Last year, the Philippines exported $43.3 million of goods to Chile, while Chile exported $290.8 million to the Philippines.
Top exports to Chile are input and output units, personal deodorants and antiperspirants, video projectors, fishing nets, and fats and oils.
Meanwhile, top imports from Chile are copper ore and concentrates, Atlantic salmon, frozen Pacific salmon, paperboard, and frozen offal of fowl.
“For Philippine products that are currently exported to Chile, we aim to lock in and secure the best possible concessions,” she said.
“We (also) want to analyze and check those Philippine products that have not been exported to Chile or are exported in very small quantities, for which there is potential for the Philippines to supply to Chile,” she added.
The Philippines and Chile are set to hold a third round of negotiations between Oct. 5 and 10 in Manila.
For the third round, she said the two sides “will continue with text-based negotiations and will aim to clear up as many as possible and conclude non-contentious chapters.”
She added a realistic target is to conclude negotiations for a CEPA this year for signing next year. — Justine Irish D. Tabile