International Trade Blocs
Philippines: Free Trade Agreement with European Free Trade Association Expected in August 2017
The Philippines’ government is expected to complete ratification of its Free Trade Agreement (FTA) with the four-nation European Free Trade Association (EFTA) by August 2017. The four countries include Switzerland, Iceland, Liechtenstein and Norway. The agreement is currently with the Department of Foreign Affairs and will later be sent to the Senate for ratification. This is part of the Philippines’ three-pillar strategy of widening and strengthening its access to Europe – one of the country’s biggest market.
Trade between EFTA states and the Philippines remained stable worth around US$ 850 million in 2015. As per the FTA, EFTA states will abolish all custom duties on industrial products, including fish and other marine products from the Philippines. In turn, Philippines will gradually eliminate custom duties on industrial products, fish and other marine products from EFTA states over a 10-year period. The Philippines is also currently negotiating a FTA with the European Union (EU), which will be in effect once internal procedures are completed.
By Dezan Shira & Associates
US president-elect Donald Trump’s opposition to the Trans-Pacific Partnership (TPP) is well-known and the future of the trade deal is now on tenterhooks. For the supporters of the TPP, Trump’s victory has meant that their worst fears are now going to unfold. Opponents of the trade deal are rejoicing at their expectation that Trump will now move quickly to fulfill one of his most controversial campaign promises – to abandon the TPP. Any prospects of the US renegotiating the TPP are not only bleak but also impractical – the trade deal was seven years in the making, meticulously negotiated and involved compromises from several countries on both sides of the Pacific.
Implications for ASEAN
So now if the US does ultimately withdraw from the TPP, what implications will this have for free trade in the ASEAN region? Before analyzing this, it should be kept in mind that TPP’s potential failure is unlikely to have any significant immediate economic impact on the region. It was not a trade deal in force, but only offered prospects of newer free trade rules coming into effect in the near future. Instead of being a step backwards, it is more a lack of further progress as far as development of free trade in the region is concerned.
By: Mareike Entzian
Much like the European Union, the ASEAN Economic Community is founded on several unchanging pillars. The community is supposed to create a single market and production base, support one another in increasing competitiveness, close gaps of an economic nature and other disparities, and to further integrate with the global economy.
In a previous article , we laid out the relationship between ASEAN’s largest markets and Germany, and we will now explain what investors can do to act on this potential. In a survey conducted by Germany Trade and Invest, German firms operating within ASEAN indicate that they are excited by new opportunities presented by the AEC and are ready to seize them. However, unlike their invested counterparts, companies not yet operating in the region continue to register reservations about committing capital. This hesitance has led German firms to fall behind other competitors, such as Japan, who have been successfully leveraging tariff removals and other benfits of found within the region.
To understand the AEC, it is paramount to be aware of its geopolitical background as well its fundamental differences to the European Union. Once it is clear that, although on paper the AEC looks like the European Union, it remains a long way from the EU’s level of integration, it becomes clear what investors can do to operate successfully.
By: Dezan Shira & Associates
Editor: Fernando Vidaurri
Earlier this month, 12 countries in the Asia Pacific region signed the Trans-Pacific Partnership (TPP) which ranks as the biggest trade agreement in history – signatory countries account for 40% of total global output. While the treaty still must be ratified by each and every party to it, its initial passage represents a monumental moment in the integration of economies on each side of the Pacific.
Four countries in the ASEAN region are among the signatories of the agreement; Brunei, Malaysia, Singapore and Vietnam, with additional member countries interested in joining the free trade area in the future. In this article we will look at who are the biggest beneficiaries in the region, the effects the treaty will have on intra-regional trade, as well as the impact on investment opportunities in non-TPP signatory ASEAN states because of this landmark trade deal.
The 22nd meeting of the Finance Ministers of the Asia-Pacific Economic Cooperation (APEC) forum was wrapped up earlier this month. The meeting focused on a range of financial and regulatory issues, as well as continuing the work of further integration of the region.
Established in 1989, APEC is an economic forum made up of 21 Pacific Rim countries and which promotes free trade throughout the Asia-Pacific region.
With Vietnam just becoming the first Asian country to sign off a Free Trade Agreement with the Moscow backed Eurasian Economic Union, the relevance of how Vietnam plays its bilateral trade agreements has suddenly taken on a more interesting slant. Vietnam has been a member of ASEAN since 1995, and has been embarking on a specific set period of reform and opening up since 2012, when its “Three Pillars” scheme was announced, intending to restructure public investment, state-owned enterprises and the banking sector. This has reached some urgency with Vietnam set to attain ASEAN Economic Community compliance by the end of this year. When completed, Vietnam, like the other major ASEAN nations of Indonesia, Malaysia, Philippines, Singapore and Thailand, will reduce tariffs on 97% of all imported products to zero. This mutual agreement also extends to the Free Trade Agreements ASEAN as a bloc has with both China and India – and is the primary reason that China-Vietnamese trade is expected to significantly increase from January 2016. This will bring Vietnam up to speed with its larger ASEAN counterparts.
By Chris Devonshire-Ellis, Andrew Salzman, and Edward Barbour-Lacey, Dezan Shira & Associates
Known as the “Lone Star State”, Texas is the second largest American state and the second most populous. The state also has the country’s second largest GSP (gross state product), amounting to US$1.6 trillion. If Texas were its own country, it would have the 12th largest economy in the world. Major industries in Texas include: agriculture, aeronautics, defense, computer technology, energy, tourism, entertainment, and healthcare.
The ten nations that make up the Association of Southeast Asian Nations (ASEAN) are becoming increasingly important trade partners for Texas. Below, we take an in-depth look at this blossoming trade relationship between Texas and ASEAN.
On November 12th, the 25th Association of Southeast Asian Nations (ASEAN) Summit held its opening ceremony in Myanmar’s capital Naypyidaw. The Summit is ASEAN’s highest policy-making body. This gathering is of particular importance since there is now less than one year to go before the implementation of the ASEAN Economic Community (AEC).
Dec. 10 – The Asian Development Bank’s new ASEAN Infrastructure Fund (AIF) has granted its inaugural loan to an Indonesian electricity project.
The US$25 million loan will go towards developing power links and expanding transmission networks from Java to Bali. Improvements are needed to solve widespread power outages and blackouts that are negatively impacting Indonesia’s tourism-reliant economy.
May 8 – The Indonesian government has shown interest in joining the United States-led Trans-Pacific Partnership (TPP), saying that its entry into the TPP negotiations would depend on trade agreements with key partners in the region.
The TPP is a trade bloc that links together trans-pacific nations, negotiations for which began in 2005. The countries that are part of or are negotiating on the TPP include Brunei, Chile, New Zealand, Singapore, the United States (U.S.), Australia, Peru, Vietnam, Malaysia, Mexico, Canada and Japan. Their combined gross domestic product (GDP) accounts for US$21 trillion or 30 percent of global output.
Taiwan, Thailand, the Philippines, Laos, Colombia and Costa Rica have all also expressed interest in joining the partnership, which aims to assist lesser developed manufacturing nations conform to internationally held standards.