The Philippines and India have recently announced that they will be starting negotiations on a free trade agreement (FTA). The announcement was made following a meeting between the Philippines’ Department of Trade and Industry (DTI) Secretary Ramon Lopez and India’s External Affairs Minister, Subrahmanyam Jaishankar.
The potential FTA between the two countries is expected to boost bilateral trade, which is currently valued at $2.6 billion. The Philippines exported $866 million worth of goods to India in 2020, while India’s exports to the Philippines amounted to $1.7 billion. With the removal of trade barriers, it is anticipated that the FTA will enhance economic cooperation between the two nations, leading to increased investments, job opportunities, and economic growth.
The FTA is also significant as it comes amid the ongoing COVID-19 pandemic, which has severely impacted economies worldwide. The negotiations between the Philippines and India are a positive sign that countries are looking to strengthen trade ties, which will help to revive their economies.
The groundwork for the FTA has already been laid, with the signing of a Memorandum of Understanding (MoU) in 2018. The MoU created a joint working group to look at the feasibility of a potential FTA. The negotiations will focus on trade in goods, services, and investments.
The Philippines and India are both members of the Regional Comprehensive Economic Partnership (RCEP), a free trade agreement between 15 countries in the Asia-Pacific region. The RCEP, which was signed in November 2020, is the world’s largest trading bloc, covering nearly a third of the global economy. The FTA between the Philippines and India is expected to complement the RCEP, leading to increased cooperation and trade between the two countries within the broader framework of the RCEP.
The potential FTA between the Philippines and India presents significant opportunities for businesses in both countries. It is important to note, however, that the negotiations will need to consider a range of factors, including the impact on local industries, employment, and the environment. The negotiations are also likely to take some time, with both countries looking to achieve a mutually beneficial agreement.
In summary, the Philippines and India’s announcement to begin negotiations on a free trade agreement is a significant development that is expected to boost economic cooperation between the two nations. The FTA will provide opportunities for increased trade, investments, and job creation, which will be essential in the post-pandemic global economic recovery. As negotiations proceed, it will be important to consider the potential impact on local industries and the environment, as well as to seek a mutually beneficial agreement.