IDEAS home Printed from https://ideas.repec.org/p/phd/pjdevt/pjd_2009_vol__xxxvi_no__2-c.html
   My bibliography  Save this paper

Factors Affecting Use or Nonuse of Free Trade Agreements in the Philippines

Author

Listed:
  • Lazaro, Dorothea C. Author_Email:
  • Wignaraja, Ganeshan Author_Email:
  • De Guzman, Genevieve Author_Email:

Abstract

Within East Asia, the outward-oriented Philippine economy is a latecomer to using free trade agreements (FTAs) as a trade policy instrument and has relied heavily on the Association of Southeast Asian Nations (ASEAN) for regional liberalization. While negotiating FTAs has consumed scarce time and other resources, limited attention has been hitherto given to evaluating the impact of FTAs--particularly the 15-year-old ASEAN Free Trade Area (AFTA)--on business activity in the Philippines.Using a survey of 155 manufactured goods exporters from three sectors (machinery and transport equipment, processed foods, and electronics), this study deals with three questions: (1) Do firms use AFTA and why and how are firms responding to AFTA and other FTAs? (2) What impedes firms from using either AFTA or other FTAs? (3) What can be done to improve FTA use at the firm level in the future?The study finds that utilization of AFTA is higher than expected from existing studies and is set to double in the future. A lack of information has been identified as the biggest barrier to FTA use. Other impediments include the availability of export-processing zone incentive schemes, low most-favored-nation rates, delays in origin administration, rent-seeking behavior, and nontariff measures in partner country markets. The paper concludes by making the case for better mainstreaming of FTAs into Philippine national trade policy, effectively encouraging the use of FTAs, and putting in place support mechanisms to Philippine firms.

Suggested Citation

  • Lazaro, Dorothea C. Author_Email: & Wignaraja, Ganeshan Author_Email: & De Guzman, Genevieve Author_Email:, "undated". "Factors Affecting Use or Nonuse of Free Trade Agreements in the Philippines," Philippine Journal of Development pjd_2009_vol__xxxvi_no__2, Philippine Institute for Development Studies.
    • Handle: RePEc:phd:pjdevt:pjd_2009_vol__xxxvi_no__2-c
    DOI: https://doi.org/10.62986/pjd2009.36.2c
    as

    Download full text from publisher

    File URL: https://www.pids.gov.ph/publication/philippine-journal-of-development/factors-affecting-use-or-nonuse-of-free-trade-agreements-in-the-philippines
    Download Restriction: no
    File URL: https://libkey.io/https://doi.org/10.62986/pjd2009.36.2c?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Richard E. Baldwin, 2008. "Managing The Noodle Bowl: The Fragility Of East Asian Regionalism," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 53(03), pages 449-478.
    2. Romeo M. Bautista & Mario B. Lamberte, 1996. "The Philippines: Economic Developments and Prospects," Asian-Pacific Economic Literature, The Crawford School, The Australian National University, vol. 10(2), pages 16-31, November.
    3. Tan, Rosalina P., 2004. "Prospects and Problems of Expanding Trade with Japan: A Survey of Philippine Exporters," Discussion Papers DP 2004-10, Philippine Institute for Development Studies.
    4. Ganeshan Wignaraja & Dorothea Lazaro & Genevieve De Guzman, 2010. "Philippines," Chapters, in: Masahiro Kawai & Ganeshan Wignaraja (ed.), Asia’s Free Trade Agreements, chapter 8, Edward Elgar Publishing.
    5. Palanca, Ellen, 2004. "China's WTO Entry: Effects on Its Economy and Implications for the Philippines," Discussion Papers DP 2004-41, Philippine Institute for Development Studies.
    6. Yap, Josef T. & Medalla, Erlinda M. & Balboa, Jenny D., 2007. "Closer Trade and Financial Cooperation in ASEAN: Issues at the Regional and National Level with Focus on the Philippines," Discussion Papers DP 2007-03, Philippine Institute for Development Studies.
    7. repec:phd:pjdevt:pjd_2001_vol__xxviii_no__1-c is not listed on IDEAS
    8. Wignaraja, Ganeshan, 2008. "FDI and Innovation as Drivers of Export Behaviour: Firm-level Evidence from East Asia," MERIT Working Papers 2008-061, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    9. Dorothea C. Lazaro & Erlinda M. Medalla, 2006. "Rules of Origin - Evolving Best Practices for RTAs/FTAs," Trade Working Papers 22006, East Asian Bureau of Economic Research.
    10. Austria, Myrna S., 2001. "Liberalization and Regional Integration: The Philippines' Strategy to Global Competitiveness," Discussion Papers DP 2001-09, Philippine Institute for Development Studies.
    11. Ganeshan Wignaraja & Dorothea Lazaro & Genevieve DeGuzman, 2010. "FTAs and Philippine Business : Evidence from Transport, Food, and Electronics Firms," Trade Working Papers 22880, East Asian Bureau of Economic Research.
    12. Aldaba, Rafaelita M., 2008. "SMEs in the Philippine Manufacturing Industry and Globalization: Meeting the Development Challenges," Discussion Papers DP 2008-15, Philippine Institute for Development Studies.
    13. Yasutake, Taeko, 2004. "Philippines-Japan Free Trade Agreement: Analyzing Its Potential Impact Using a Computable General Equilibrium Model," Discussion Papers DP 2004-40, Philippine Institute for Development Studies.
    14. Cororaton, Caesar B. & Cockburn, John, 2007. "Trade reform and poverty--Lessons from the Philippines: A CGE-microsimulation analysis," Journal of Policy Modeling, Elsevier, vol. 29(1), pages 141-163.
    15. Jenny D. Balboa & Erlinda M. Medalla & Josef T. Yap, 2007. "Closer Trade and Financial Cooperation in ASEAN : Issues at the Regional and National Level with Focus on the Philippines," Trade Working Papers 21907, East Asian Bureau of Economic Research.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ganeshan Wignaraja & Dorothea Lazaro & Genevieve DeGuzman, 2010. "FTAs and Philippine Business: Evidence from Transport, Food, and Electronics Firms," ADBI Working Papers 185, Asian Development Bank Institute.
    2. Medalla, Erlinda M. & Balboa, Jenny D., 2009. "ASEAN Rules of Origin: Lessons and Recommendations for Best Practice," Discussion Papers DP 2009-36, Philippine Institute for Development Studies.
    3. Erlinda M. Medalla & M. Supperamaniam, 2008. "Suggested Rules of Origin Regime for EAFTA," Trade Working Papers 22014, East Asian Bureau of Economic Research.
    4. Rajah Rasiah & Johannes Dragsbaek Schmidt (ed.), 2010. "The New Political Economy of Southeast Asia," Books, Edward Elgar Publishing, number 14019, June.
    5. Yap, Josef T. & del Prado, Fatima & Balboa, Jenny D., 2010. "Achieving the ASEAN Economic Community 2015: Challenges for the Philippines," Discussion Papers DP 2010-20, Philippine Institute for Development Studies.
    6. Medalla, Erlinda M. & Supperamaniam, M., 2008. "Suggested Rules of Origin Regime for EAFTA," Discussion Papers DP 2008-22, Philippine Institute for Development Studies.
    7. Sanchita Basu & Aekapol Chongvilaivan, 2010. "Rationale for Free Trade Agreements (FTAs) in Southeast Asia," Chapters, in: Rajah Rasiah & Johannes Dragsbaek Schmidt (ed.), The New Political Economy of Southeast Asia, chapter 8, Edward Elgar Publishing.
    8. Erlinda M. Medalla & M. Supperamaniam, 2008. "Suggested Rules of Origin Regime for EAFTA," Trade Working Papers 22664, East Asian Bureau of Economic Research.
    9. Erlinda M. Medalla, 2008. "Rules of Origin : Regimes in East Asia and Recommendations for Best Practice," Trade Working Papers 22665, East Asian Bureau of Economic Research.
    10. Medalla, Erlinda M., 2008. "Rules of Origin: Regimes in East Asia and Recommendations for Best Practice," Discussion Papers DP 2008-19, Philippine Institute for Development Studies.
    11. Medalla, Erlinda M. & Rosellon, Maureen Ane D., 2012. "ASEAN+1 FTAs and the Global Supply Chain in East Asia: the Case of the Philippine Automotive and Electronics Sectors," Discussion Papers DP 2012-38, Philippine Institute for Development Studies.
    12. Jenny D. Balboa & Fatima Lourdes E. Del Prado & Josef T. Yap, 2010. "Achieving the ASEAN Economic Community 2015 : Challenges for the Philippines," Governance Working Papers 23089, East Asian Bureau of Economic Research.
    13. repec:phd:pjdevt:pjd_2008_vol__xxxv_no__2-b is not listed on IDEAS
    14. Kazunobu Hayakawa & Hiroshi Mukunoki, 2023. "The magnification effect in global value chains," Review of International Economics, Wiley Blackwell, vol. 31(1), pages 141-157, February.
    15. Yap, Josef T. & Medalla, Erlinda M. & Aldaba, Rafaelita M. & del Prado, Fatima & Mantaring, Melalyn C. & Rosellon, Maureen Ane D. & Ledda, Veredigna M., 2015. "How Are Firms Responding to Philippine Free Trade Agreements?," Discussion Papers DP 2015-22, Philippine Institute for Development Studies.
    16. Hiroyuki Taguchi & Ni Lar, 2015. "Fragmentation And Trade Of Machinery Parts And Components In Mekong Region," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 60(05), pages 1-21, December.
    17. Willem Thorbecke & Nimesh Salike, 2011. "Understanding Foreign Direct Investment in East Asia," ADBI Working Papers 290, Asian Development Bank Institute.
    18. Kaliappa Kalirajan,, 2012. "Regional Cooperation towards Green Asia : Trade and Investment," Development Economics Working Papers 23291, East Asian Bureau of Economic Research.
    19. Richard Baldwin, 2013. "Trade and Industrialization after Globalization's Second Unbundling: How Building and Joining a Supply Chain Are Different and Why It Matters," NBER Chapters, in: Globalization in an Age of Crisis: Multilateral Economic Cooperation in the Twenty-First Century, pages 165-212, National Bureau of Economic Research, Inc.
    20. Rafaelita M. Aldaba, 2008. "Globalization and the Need for Strategic Government-Industry Cooperation in the Philippine Automotive Industry," Microeconomics Working Papers 22050, East Asian Bureau of Economic Research.
    21. Celine de Quatrebarbes & Bertrand Laporte & Stéphane Calipel, 2021. "Fighting the soaring prices of agricultural food products. VAT versus Trade tariffs exemptions in a context of imperfect competition in Niger : CGE and micro-simulation approach," CERDI Working papers hal-03138369, HAL.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:phd:pjdevt:pjd_2009_vol__xxxvi_no__2-c. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Michael Ralph M. Abrigo (email available below). General contact details of provider: https://edirc.repec.org/data/pidgvph.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.