Background:

The Philippines’ entry to the World Trade Organization had opened the gates of trans-boundary trading in many respects. However, numerous countries want to explore even more trade activities and want to tackle, beyond the WTO, rules on investments, competition policy, trade facilitation, and government procurement. These countries believe that the WTO does not provide adequate venue for more trade liberalization.

In response to a more open trading, countries, including Philippines, venture into more ambitious and more liberal trade activities by entering into bilateral and regional trade agreements and by aggressively pursuing the WTO Doha Round.

Despite these dizzying developments and the fact that many trade policies had to be adjusted to implement these trade agreements, Philippine Trade Policy formulation and negotiation continue to be unclear due to the fact that the consultation process is weak and because of the lack of a single agency that will handle trade negotiations.

How will thePhilippinesformulate its Trade Policy and negotiate trade agreements? Will improving the consultation process alone address the myriad of issues? Or will a single agency that will handle Philippine Trade Negotiations that provides for a consultation mechanism be more relevant?

In answering the demands for clear direction-setting of Philippine Trade Policy, the Department of Trade and Industry is exploring the possibility of enhancing the structure and process of the current trade consultation process in thePhilippinesby adopting the U.S Model of trade consultation through the Industry Trade Advisory Committee (ITAC).

However, as will be discussed, the DTI proposal only addresses one of the many problems under the current set-up.

What is ITAC?

The Industry Trade Advisory Committee (ITAC) in the U.S. is a body that holds consultations on international trade issues. It is a public-private partnership trade advisory system jointly administered by the US Department of Commerce and the US Trade Representative (USTR). Its members, representing different industries, are appointed by the Secretary of Commerce and the USTR.

The Department of Trade and Industry is exploring the possibility of also creating an ITAC in the Philippines in order to enhance the structure and process of our international trade consultation process.

What are the objectives in creating the ITAC in the Philippines?

  • To provide an overarching institutional framework that shall facilitate consultations with the private sector and domestic stakeholders so that they could provide input to the government across trade issues on an ongoing basis.
  • To help the government formulate consistent international trade policies which will guide our trade negotiators, and thus promote the national economic interest and the sectoral economic interests and competitiveness of key export sectors that promote development and job creation.

What will the Philippine ITAC do?

  • Give advice on objectives and bargaining positions for trade negotiations and other trade-policy related matters;
  • Prepare reports on proposed trade agreements for the Administration and Congress.

What is the effect of the recommendations of the stakeholders through ITAC in the trade negotiation process?

The recommendations and the advices that ITAC give to the government are not binding, but nonetheless the government takes note of the recommendations because at the end of the day, it is (government) accountable to the stakeholders. The reports submitted to the government are just advisory in nature. (Dr. Sevilla)

Will ITAC solve the problems in the Philippines’ current trade negotiations?

No, ITAC is only an advisory committee and not a negotiation committee.

We believe that the ITAC will address partly the issue of lack of consultation. However, it will not address the most important problem of having different government agencies involved in different aspects of trade negotiations, and different agencies still involved in different types of trade agreements.

It is our position that we need a Philippine Trade Representative Office which under which all trade negotiations shall be centralized.

Just as the ITAC in theU.S.is under the USTR, we believe that it is best to have an ITAC here but only under the PTRO.

The ITAC cannot, by any stretch, perform the tasks of the PTRO.

Is ITAC the same with PTRO?

No, ITAC is only a trade consultation advisory mechanism. Unlike PTRO, it does not address the need to have a single agency to handle trade negotiations.

The PTRO is the sole agency that will handle international trade policy formulation at the executive level and negotiations. There are bills filed in Congress which provide for the creation of a Philippine Trade Representative Office (PTRO). These bills are sponsored by Senators Mar Roxas and Sergio R. Osmeña III in the Senate, and Representatives Lorenzo R. Tanada III and Speaker Prospero Nograles, among others, in the House of Representatives.

Do PTRO bills provide a framework for the establishment of a consultation mechanism similar to ITAC?

Yes, it does.

The bills provide that the Philippine Trade Representative (PTR) shall seek information and advice from a Multi-sectoral Advisory Committee composed of representatives of the private sector, non-government organizations, and members of Congress working on trade and investment policy with respect to negotiating objectives and bargaining positions, and the operation, implementation, and monitoring of trade and investment agreements, including trade remedies, dispute settlements, and violations of trade and investment agreements.

See diagram below for the PTRO Consultation Linkages.

Diagram 1. PTRO Consultation Linkages

How shall we treat ITAC?

The envisioned work of ITAC can be included as a component of the work of the PTRO. As presented, it is apparent that the ITAC cannot and will not be a substitute for the Philippine Trade Representative Office. Instead, it will be one of the small but important bodies within the PTRO.

It must be noted that even in the United States, it was a by Congressional fiat that a US Trade Representative Office was established and an advisory council, similar to the ITAC as envisioned by the DTI, remains administered by the USTR.

While trade negotiations can vastly improve through a more efficient executive mechanism, it must not, however, be forgotten that government and governance is not subject to executive monopoly. Decisions in international trade go beyond issues within the jurisdiction of the executive branch. It includes positions on amendment of existing laws and the creation of new ones to conform to international trade agreements. It is therefore constitutionally and economically erroneous to assert that the role of Congress is limited only to the act of Senate concurrence.

Congress must be consulted and must participate in the entire process.

Sources:

  • An Assessment of the Adaptation of an Industry Trade Advisory Council By Dr. Christina Sevilla, Ryan Evangelista and Sheryl Gaerlan
  • Comments on the Adaptation of an Industry Advisory Committee by the Initiatives for Dialogue and Empowerment through Alternative Legal Services, Inc.
  • Primer on the Creation of A Philippine Trade Representative Office by the Philippine Legislator’s Committee on Population and Development Foundation, Inc.
Primer on The Industry Trade Advisory Committee

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