DISCUSSION PAPER SERIES NO. 2005-26
The paper describes the current decision-making structure for trade policy formulation in the Philippines and compares it with the systems in selected countries. It cites difficulties in the current set-up, such as: 1) turf mentality among government agencies that tend to paralyze inter-agency committees in coming up with an overall position that fully acknowledges trade-offs; 2) lack of appreciation of and capacity for trade research that should inform negotiating positions; 3) unclear delineation of authority; 4) lack of suitable mechanisms for consultation and feedback on negotiation progress and impact, not only regarding tariffs but also of other items under discussion. This paper argues that there is need for a single agency that will handle all international trade negotiations, coordinate effectively with other government departments and agencies, and formulate final trade positions for negotiations. It proposes either: 1) the creation of an independent agency for trade negotiation, something akin to the US Trade Representative Office; or, considering fiscal realities in the short-run, 2) at least, the strengthening of the existing Bureau of International Trade Relations (BITR) position within the Tariff and Related Matters (TRM) Committee structure. A stronger, centralized body, principally or primarily in charge of trade policy negotiations would be able to curb the turf battles among different agencies, or, at a minimum, prevent them from stalling the realization of trade mandates for negotiators. The paper also stresses the crucial role of trade research in supporting negotiations and suggests ways to strengthen capacity in this area.