Philippines benefiting most from AFTA: Official

Philippines benefiting most from AFTA: Official

Agence France Press, Manila

The Philippines, where firms are pleading for greater protection from regional competition, has benefited the most under a Southeast Asian free trade plan, ASEAN secretary general Rodolfo Severino said Thursday.

Severino said under the tariff-busting plan which began in 1993, the Philippines' exports to other members of the Association of Southeast Asian Nations (ASEAN) grew almost seven times.

Indonesia's exports increased by about 118 percent, Malaysia by almost 90 percent, and Thailand by nearly 80 percent, he said, citing comparative figures among the founding members of ASEAN.

"We often hear from those who fear being hurt by the ASEAN Free Trade Area or AFTA. Those who thrive and benefit almost always stay quiet," Severino told a forum here.

Severino said the Philippines' total exports as a share of the ASEAN market expanded from seven to 15.7 percent from 1993 to 2000.

Indonesia's exports as a share of ASEAN expanded from 13.6 percent to 17.5 percent while Thailand's rose from 16 percent to 21 percent over the same period. Malaysia dropped from 28 percent to less than 25 percent.

Some Philippine firms have pleaded for protection from regional competition because of certain disadvantages they say they suffer, alleging bad government policies and infrastructure and expensive power and telecommunications.

But Severino said "the remedy for these alleged ills is not protection from competition, which hurts other industries as well as consumers.

"The remedy is to strengthen the competitiveness of Philippine industries and firms by doing something about those things that weaken their competitiveness," he said.

Severino, an ex-Philippine diplomat who has campaigned strongly for opening up markets within the region, said Filipino industries should "get the government's support, not its protection" to remove the obstacles facing them.

The ASEAN free trade pact gives duty free privileges to products traded among member countries and which have at least 40 percent local content.

ASEAN leaders have agreed to completely eliminate all import duties in the region beginning in 2010.

Tariffs on a wide range of products in the key economies have been brought down to between zero and five percent under the AFTA.

Aside from the Philippines, Malaysia, Thailand, Indonesia and Singapore, the other ASEAN members are Brunei, Cambodia, Laos, Myanmar and Vietnam.