Trans-Pacific Partnership trade pact risks splitting Asean, Manila warns

Manila says Trans-Pacific Partnership may cause resentment unless it includes all bloc's members

PUBLISHED : Friday, 11 April, 2014, 11:03pm
UPDATED : Friday, 11 April, 2014, 11:03pm


A US-backed Pacific free-trade pact could cause resentment in Southeast Asia, leaving some nations in the region better positioned to access the American market than others, a top Philippine official said.

Finance Secretary Cesar Purisima proposed inviting all 10 members of the Association of Southeast Asian Nations to join the Trans-Pacific Partnership (TPP), even if most cannot now meet the conditions for joining.

He said on Thursday that would demonstrate a clear pathway for entering the pact, without lowering standards.

Asean is itself striving to reduce trade barriers among its members, but only four of them are in the TPP. They are Brunei, Malaysia, Singapore and Vietnam. Those outside the TPP are Cambodia, Indonesia, Laos, Myanmar, the Philippines and Thailand.

"If there's a lag between the joining of the others in a high-quality agreement such as TPP, there can be resentment, especially as we continue to integrate," Purisima told the Centre for Strategic and International Studies think tank.

He said countries like the Philippines would be at a major handicap for products where they compete for the US market with the four other countries.

But he said this would incentivise reforms. The Philippines would have little choice but to make constitutional or legislative changes needed for coming into the TPP if exclusion from the pact was hurting businesses and jobs, he said.

Twelve nations, including the US and Japan, accounting for about 40 per cent of the global economy are negotiating the TPP. It aims to cut tariffs, ease regulatory barriers, protect intellectual property, and set labour and environmental standards.

The pact is a pillar of President Barack Obama's effort to deepen US engagement in Asia.

Obama will be looking to demonstrate his administration's commitment to the region when he visits the Philippines and three other Asian nations this month.

The deadline for completing TPP keeps slipping and finalising it still appears far off. There is political opposition in the US among many of Obama's fellow Democrats, and the US and Japanese negotiators are also struggling to narrow differences.

Purisima voiced preference for the more "inclusive" approach of a rival planned trade pact between Asean, China and four other nations. Members of the Regional Comprehensive Economic Partnership can drop trade policies they disagree with and exclude sensitive industries from competition.