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Canada and Philippines Sign Trade Agreement to Boost Economic Ties
Canada and the Philippines have deepened their economic partnership by signing a Comprehensive Economic Partnership Agreement (CEPA) on March 11, 2021. This marks the first free trade agreement of Canada with an Association of Southeast Asian Nations (ASEAN) member state and the second one with an Asian country after South Korea in 2014. The CEPA aims to enhance bilateral trade and investment by reducing barriers, expanding market access, and facilitating regulatory cooperation between the two nations.
The CEPA covers a wide range of sectors, including goods, services, investment, intellectual property, e-commerce, and government procurement. It eliminates tariffs on 99.9% of the tariff lines for Canadian goods exported to the Philippines, such as wheat, pork, beef, canola oil, seafood, and forestry products, over a period of up to 15 years. It also grants duty-free and quota-free access for Philippine exports to Canada, such as tropical fruits, industrial goods, and apparel. Moreover, it provides for rules of origin that enable more flexible and simplified procedures for claiming preferential treatment, especially for small and medium-sized enterprises (SMEs).
The CEPA also facilitates the movement of professionals and skilled workers between Canada and Philippines by recognizing their qualifications and credentials, and by allowing temporary entry and stay for up to two years. This is expected to benefit sectors such as information technology, engineering, health care, and education, which require a highly skilled and diverse workforce. The CEPA also includes provisions on labor and environmental standards, gender and development, and cooperation on customs and trade facilitation, which ensure that the economic benefits are balanced and sustainable.
The CEPA is a significant milestone in the bilateral relations between Canada and the Philippines, which have a long history of trade and cultural exchange. Canada ranks as the 15th largest trading partner of the Philippines, with a bilateral trade worth over $2.4 billion in 2019. Canadian companies such as Manulife, Scotiabank, and Bombardier have been operating in the Philippines for many years, while Philippine companies such as Jollibee, San Miguel, and SM have also invested in Canada. The CEPA is expected to expand the trade and investment flows, enhance the competitiveness of both economies, and create more jobs and opportunities for their people.
The CEPA is also aligned with Canada`s broader strategy of diversifying its trade and investment relations beyond its traditional partners in the Americas and Europe, and expanding its presence in the dynamic and growing markets of Asia. The CEPA complements Canada`s participation in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which includes four ASEAN member states (Vietnam, Singapore, Malaysia, and Brunei) and offers a broader framework for trade liberalization and cooperation in the Asia-Pacific region. The CEPA also reflects Canada`s commitment to an open, rules-based, and inclusive international trading system that benefits all countries and promotes sustainable development.
In conclusion, the trade agreement between Canada and Philippines is a positive development for both countries and for the region. It strengthens their economic ties, enhances their competitiveness, and promotes their shared values and interests. It also underscores the importance of free and fair trade agreements in mitigating the adverse effects of the COVID-19 pandemic and in building a resilient and prosperous future for all. As the world recovers from the pandemic and adapts to the new realities of global trade, Canada and Philippines are poised to benefit from their visionary and pragmatic approach to economic cooperation.