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Will the Philippines benefit from the Trans-Pacific Partnership?

The historic Trans-Pacific Partnership (TPP) had just been signed in Auckland, New Zealand by 12 countries which includes Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam. The Philippines is among the countries who is pushing to be included in the TPP but will it be beneficial for the Philippines specially businesses?


TPP is seen as a United States driven deal which aims to counter another trade agreement being hosted by China – Regional Comprehensive Economic Partnership (RCEP).  This alternative trade agreement includes  ten member states of the Association of Southeast Asian Nations (ASEAN) (Brunei, Burma (Myanmar), Cambodia, Indonesia, Laos, Malaysia, the Philippines, Singapore, Thailand, Vietnam) and the six states with which ASEAN has existing FTAs (Australia, China, India, Japan, South Korea and New Zealand).

Will the Philippines Benefit from the Trans-Pacific Partnership?

According to opponents of the TPP deal, this agreement gives too much power to large multinational corporations which puts at risk local businesses.  One of the troubling provisions give these corporations a right of input into regulatory decisions.  This means that they can influence and have more power over promulgation of laws being enacted on member countries, a right that is not accorded to small and medium businesses in the country.


“More than 1,600 US companies, the most litigious in the world, will gain new rights they can enforce through private offshore tribunals if/when regulation damages their value or profits,” says New Zealand law professor Jane Kelsey.

TPP opponents also states that the deal plans to kill freedom of the internet giving control once again to large corporations.  According to reports,  the TPP text proposes creating tribunals (courts) that could overrule the decisions of countries, undermining sovereignty and governments power.  We have discussed this thoroughly on our article, “Multinational Corporations Plans to Kill the Internet?

Businesses must be properly consulted on TPP

If the Philippine government decides to join the TPP, local businesses should be properly consulted through a public forum.  Provisions of the trade agreement should be properly discussed.  The deal had been accused of being too secretive and small and medium businesses are not even consulted.

There are indications for example that certain provisions in the TPP risks our capacity to legislate to protect our environment, labour standards and health since large multinational companies will be given a direct right to participate in legislation.

Major risks of the TPP

According to a study, “Trading Down:  Unemployment, Inequality and Other Risks of the Trans-Pacific Partnership Agreement” written by Jeronim Capaldo and Alex Izurieta, the trade deal might result to the following:

  • TPP would generate net losses of GDP in the United States and Japan. For the United States, they project that GDP would be 0.54 percent lower than it would be without TPP, 10 years after the treaty enters into force. Japan’s GDP is projected to decrease 0.12 percent.
  • Economic gains would be negligible for other participating countries – less than one percent over ten years for developed countries and less than three percent for developing ones. These projections are similar to previous findings that TPP gains would be small for many countries.
  • TPP would lead to employment losses in all countries, with a total of 771,000 lost jobs. The United States would be the hardest hit, with a loss of 448,000 jobs. Developing economies participating in the agreement would also suffer employment losses, as higher competitive pressures force them to curtail labor incomes and increase production for export.
  • TPP would lead to higher inequality, as measured by changes in the labor share of national income. The authors foresee competitive pressures on labor income combining with employment losses to push labor shares lower, redistributing income from labor to capital in all countries. In the United States, this would exacerbate a multi-decade downward trend.
  • TPP would lead to losses in GDP and employment in non-TPP countries. In large part, the loss in GDP (3.77 percent) and employment (879,000) among non-TPP developed countries would be driven by losses in Europe, while developing country losses in GDP (5.24%) and employment (4.45 million) reflect projected losses in China and India.

You can view the full study here.

Philippine businesses will find it harder to cope up

Philippine businesses who are already pressured by the APEC and ASEAN Economic community trade deals will find it even harder to cope with additional trade liberalization like the TPP in place.

Majority of businesses in the Philippines belong to the micro, small and medium enterprises and they will be the most susceptible to trade liberalization.  Despite the big promises of the TPP, it should be a deal that needs deep study and consideration.

Do you have any insight about the Trans-Pacific Partnership agreement?  Share your views.

You can see the full text of the TPP here.


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A blogger and social media user since 2007 back when it was not yet a mainstream. Graduate of BS Accountancy, a social media buff, Wattpad writer, entrepreneur, cosplayer, social activist and counselor.

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