Definition:

💚 What is global Trade

♥GLOBAL TRADE, also known as international trade, works through a flow of huge complex supply
chains between the countries that source raw materials, to the countries that manufacture the raw
materials, and later to the consumer nation,
💛 GLOBAL TRADE IS THE EXCHANGE OF GOODS OR SERVICES BETWEEN COUNTRIES AND IS MADE UP
OF THE TOTAL IMPORTS AND EXPORTS OF EACH PARTICIPATING NATION.
💛 IT IS GOVERNED BY SUPPLY AND DEMAND AND RELIES ON THAT SUPPLY AND DEMAND TO
DETERMINE THE PRICE OF EACH PRODUCT OR SERVICE SOLD.

❤Natural Resources
♥Natural resources involve the exchange of natural resources such as wood, iron ore, or water
💛 PHILIPPINES TEND TO IMPORT RICE FROM OTHEr countries like Vietnam, Myanmar, and Thailand.

♥ Components and Parts

💛One example of components and parts is a bicycle. It is common for a product such as a bicycle to
require different parts from various nations. For example, a bicycle company in Canada might depend on
international trade for parts suppliers from Europe, Japan, and China.

♥ Finished Goods
♥ These are products that the end consumer consumes. The finished goods are identified as part of the
product where they were manufactured.
💛 For example, an airplane assembled in the U.S.A is considered an American product even though it
contains parts and components from Japan and Europe.

💚 What is Global Free Trade?

❤ Free trade, usually defined as the absence of tariffs, quotas, or other governmental impediments to
international trade, and allows each country to specialize in the goods it can produce cheaply and
efficiently relative to other countries.
💛 FREE TRADE OCCURS WHEN GOODS AND SERVICES CAN BE BOUGHT AND SOLD BETWEEN
COUNTRIES OR SUB-NATIONAL REGIONS WITHOUT TARIFFS, QUOTAS OR OTHER RESTRICTIONS BEING
APPLIED.
💛 IN SIMPLE WORD, IT IS THE EXCHANGE OF PRODUCTS BETWEEN INTERNATIONAL BORDERS.  

💙
💚 What Is a Free Trade Agreement (FTA)? *****
❤ A free trade agreement is a pact between two or more nations to reduce barriers to imports and
exports among them. Under a free trade policy, goods and services can be bought and sold across
international borders with little or no government tariffs, quotas, subsidies, or prohibitions to inhibit
their exchange.
💛 A FREE TRADE AGREEMENT IS AN AGREEMENT BETWEEN TWO OR MORE COUNTRIES WHERE THE
COUNTRIES AGREE ON CERTAIN OBLIGATIONS THAT AFFECT TRADE IN GOODS AND SERVICES.
💛 FTAS CAN HELP YOUR COMPANY TO ENTER AND COMPETE MORE EASILY IN THE GLOBAL
MARKETPLACE THROUGH ZERO OR REDUCED TARIFFS AND OTHER PROVISIONS.

💚 IMPORT AND EXPORT

💛 Importing and Exporting are means of Foreign Trade.
♥ Goods and services that enter into a country for sale are called imports. Goods and services that leave
a country for sale in another country are called exports.
💛 EXPORTING REFERS TO THE SELLING OF GOODS AND SERVICES FROM THE HOME COUNTRY TO A
FOREIGN NATION. WHEREAS, IMPORTING REFERS TO THE PURCHASE OF FOREIGN PRODUCTS AND
BRINGING THEM INTO ONE’S HOME COUNTRY.

❤ Example of export:
❤ As of January 2022, the PSA recorded a total export value of coconut oil at US$178 million. From 2021
to 2022, coconut oil exports showed a record annual increase of 110.1%, proving that this is a product in
high demand. In December 2021, the leading destinations for coconut oil, OEC numbers indicate,
💛 As mentioned earlier, coconut oil is at the top of Philippine exports. It plays a vital role in the growth
of the country’s export rates, as several countries consume several tons of coconut oil annually. Coconut
oil leads the top 10 valued export goods by an estimate of 110%.

❤ Top IMPORTS of the Philippine

❤ As of June 2022, electronic products were the highest commodity import goods into the Philippines
that worth a value of 2.87 billion U.S. dollars. Mineral fuels, lubricants, and related materials came in
next with a FOB value of roughly 2.64 billion U.S. dollars.

💚 Example of FTA
❤The Philippines and Japan entered into a free trade agreement in 2008. PJEPA is the Philippines’ only
bilateral free trade agreement.
💛 The Japan-Philippines Economic Partnership Agreement (JPEPA), the first bilateral FTA that the
Philippines entered into, aims to facilitate and promote free transborder flow of goods, services, capital,
and people between the two countries.

💚 3 Types of Trade Agreements

💛 TRADE AGREEMENTS ARE USUALLY UNILATERAL, BILATERAL, OR MULTILATERAL.

💙❤ Unilateral Trade Agreement

❤ These occur when a country imposes trade restrictions and no other country reciprocates. It helps the
emerging market's economy grow, creating new markets for exporters.
💛 It's unilateral because it doesn't require other nations to do the same.
💛 A unilateral trade agreement is a commerce treaty that a nation imposes without regard to others. It
benefits that one country only. It is unilateral because other nations have no choice in the matter. It is
not open to negotiation.
💛 For example, it happens when a country imposes a trade restriction, such as a tariff, on all imports. It
also applies to a state that lifts a tariff on its partner's imports even when the favor is not reciprocated. A
large country might do that to help out a small one.
💛 some developed countries like The United States and other developed countries only do this as a
type of foreign aid in order to help emerging markets strengthen strategic industries that are too small
to be a threat.
💛 In that scenario, other countries would keep their tariffs on U.S. exports. That would give them a
unilateral advantage. They could ship cheap goods into the United States, but U.S. exports would be
priced higher in their countries.
❤ Bilateral Trade Agreements
❤ Bilateral agreements involve two countries. Both countries agree to loosen trade restrictions to
expand business opportunities between them.
💛 A BILATERAL TRADE AGREEMENT CONFERS FAVORED TRADING STATUS BETWEEN TWO NATIONS. BY
GIVING THEM ACCESS TO EACH OTHER'S MARKETS, IT INCREASES TRADE AND ECONOMIC GROWTH.

❤ Multilateral Trade Agreements

❤ These agreements among three countries or more are the most difficult to negotiate. The greater the
number of participants, the more difficult the negotiations are. By nature, they are more complex than
bilateral agreements, as each country has its own needs and requests.
💛The agreements reduce tariffs and make it easier for businesses to import and export. Since they are
among many countries, they are difficult to negotiate.

🧡 Example of Multilateral trade agreement

❤ The Regional Comprehensive Economic Partnership (RCEP) is a trade agreement between member
economies of the Association of Southeast Asian Nations (ASEAN) and with its FTA partners (Australia,
China, Japan, New Zealand and Republic of Korea).

💚 Restrictions in Global Trade

❤ The growing rhetoric about imposing tariffs and limiting freedom to trade internationally reflects a
resurgence of old arguments that stay alive in large part because the benefits of global free trade are
often diffuse and hard to see, this is because of the restrictions on foreign trade.
💛 so the restrictions on foreign trade can often harm the very people they aim to protect: which is the
consumers and producers. Trade restrictions limit the choices of what the consumers can buy; they also
drive up the prices of everything from clothing and groceries to the materials manufacturers use to
make everyday products.

💚 There are three main restrictions or barriers to global trade:

❤ 1. Tariff - The most common barrier to trade is a tariff. It is a tax on imports. Tariffs raise the price of
imported goods relative to domestic goods.
💛 A TARIFF refers to a tax imposed on imported goods. A tariff can either be imposed on a specific
commodity or country. This is the most common way of setting trade barriers to another country.

❤ 2. Quota - A quota is a government-imposed trade restriction that limits the number or monetary
value of goods that a c ountry can import or export during a particular period. Countries use quotas in
international trade to help regulate the volume of trade between them and other countries.
💛 This is generally done to protect and encourage domestic business and balance trade. Governments
implement quotas by placing limits on the value or number of goods exported or imported. For example,
a nation may restrict another from importing a maximum of 100 barrels of crude oil.

❤ 3. Government Subsidy - Subsidies make those goods cheaper to produce than in foreign markets.
This results in a lower domestic price.
♥ A subsidy is any financial aid provided by a government to a producer or seller of a good or service
that is designed to increase the competitiveness of a particular industry firm or entire industry.
💛 For example, agricultural products are frequently subsidized by national governments in an effort to
increase domestically grown and raised foodstock.

💚 What does the free trade agreement do to the Philippine economy?

❤ Free trade agreements contribute to greater economic activity and job creation in the Philippines and
deliver opportunities for big and small businesses to benefit from greater trade and investment.
💛 Free trade agreements don't just reduce and eliminate tariffs, they also help address behind-the-
border barriers that would otherwise delay the flow of goods and services; encourage investment; and
improve the rules affecting such issues as intellectual property, e-commerce and government
procurement.

💚Bilateral FTA of the Philippines

💚 JPEPA is a comprehensive bilateral trade and investment agreement between Japan and the
Philippines aimed at increasing trade and investment opportunities between the two economies. It is
the first bilateral free trade agreement (FTA) for the Philippines after 50 years.

💚 Philippines-Japan Economic Relations

Trade Situation with Japan
❤Japan is the second largest trading partner of the Philippines next to the US. In 2006, Japan amounted
to US$7.9 billion or 17% of the country’s total exports (Table 1).
💛The leading Philippine exports to Japan consist of electronic products, woodcraft furniture, ignition
wiring sets, fresh bananas, and iron ores.
Japan is our biggest export market for asparagus,
bananas, papayas, nata de coco, mangoes, chicken,
shrimps and prawns, and yellowfin tuna.
💛 Philippine imports from Japan were pegged at US$7.3 billion in 2006 or 14% of total imports (Table
1). The leading Philippine imports from Japan consist of electronic products, industrial machinery and
equipment, transport equipment, iron and steel and electrical machinery.

♥ Under JPEPA, Filipino nationals would be allowed to practice their profession in Japan subject to
certain conditions. In the immediate future, at least two groups of Filipino professionals are expected to
benefit from JPEPA: Filipino health professionals (nurses and care workers) and seafarers.
💛 Filipino nurses and care workers can practice their
profession in Japan. A Filipino nurse is given a maximum of 2 years’ stay
in Japan to comply with the requirements.
💛 Filipino seafarers, likewise, are expected to benefit from JPEPA through Japan’s continued assistance
in education and skills enhancement. In fact, Japan made investments in the Philippines’ efforts to
streamline and build up the skills, professionalism, and continued process improvement through
appropriate training centers and facilities. It donated a computerized system to the Maritime Training
Council (MTC) to maintain the integrity of the assessment and certification process for the Filipino
seafarers.
💛 Filipino seafarers, likewise, are expected to benefit from JPEPA in a sense that Japan invested a lot to
the Philippines in regards to maritime industry in the country. They invested on infrastructure,
education, apparatus and machines, and other investments that are beneficial to the filipino seafarers.
They even donated computer systems in some schools in the Philippines. Japan also invested in maritme
training where the flipino seafarers can enhance their skills and profession to mee the standard needed.

💚 Example of Multilateral trade agreements:

♥ REGIONAL COMPREHENSIVE ECONOMIC PARTNERSHIP
❤ The Philippines and 14 Asia Pacific countries – Australia, Brunei, Cambodia, China, Indonesia, Japan,
South Korea, Laos, Myanmar, New Zealand, Singapore, Thailand, and Vietnam – signed a free trade
agreement in 2020. The RCEP agreement covers trade in goods, trade in services, investment,
intellectual property, e-commerce, competition, small and medium enterprises, and government
procurement.
💛THROUGH RCEP, NEW OPPORTUNITIES FOR TRADE AND INVESTMENT MAY BE HARNESSED. AS A
RESULT, THE ENHANCED PARTNERSHIP CAN CONTRIBUTE TO HUMAN RESOURCE AND INFRASTRUCTURE
DEVELOPMENT—WHICH ARE KEY TO THE ECONOMIC GROWTH AND DEVELOPMENT OF THE
PHILIPPINES.

❤ RCEP can provide additional opportunities for

Filipinos to generate income by providing business and professional services. The opportunities offered
by RCEP can only be maximized by enhancing the Philippines’ strengths in competitiveness, language
proficiency, cultural adaptability, human capital, and government participation.
💛 THROUGH RCEP, THE PHILIPPINES CAN INVITE ENTERPRISES, INVESTORS, AND PROFESSIONALS TO
ENGAGE IN BUSINESS IN THE COUNTRY. THIS CAN EVENTUALLY DEVELOP HUMAN CAPITAL,
INFRASTRUCTURE, TOURISM, AND OTHER INDUSTRIES, AND ENHANCE DOMESTIC PRODUCTIVITY IN THE
LONG RUN.

💛 Conclusion
💛 Free trade agreement increases prosperity for the citizens of all participating nations—by allowing
consumers to buy more, better-quality products at lower costs.
💛 It drives economic growth, enhanced efficiency, increased innovation, and the greater fairness that
accompanies a rules-based system.
💛 Engaging in global trade also means more job opportunities for Filipinos in the working class.
Additionally, participating in global trade, especially in free trade areas, is a good opportunity for
business owners to specialize in a particular market, which leads to greater efficiency in production and
higher levels of innovation.