PH, EFTA to bridge agricultural gaps

The Philippines and the European Free Trade Association (EFTA) have narrowed down their differences over the core components of the proposed free trade agreement and agreed that these gaps are bridgeable to ensure the conclusion of talks before the term of President Aquino expires in June next year.

Trade and Industry Undersecretary Adrian S. Cristobal Jr., who led the Philippine negotiating panel for the 4th round of FTA negotiations in Geneva, told reporters that both parties had a productive and constructive round. They also agreed to hold the 5th round, hopefully the last, in the first quarter next year in Manila.

“In this 4th round, we managed to narrow down the differences on the core components of economic partnerships on trade in goods, services, and investments,” he said.

While there are some sensitivities in the agriculture sector, Cristobal said that agri products between the two parties are not competing with each other but are rather complementary.

“We think whatever gaps there maybe these are bridgeable gaps, meeting some would be obviously meeting them and these are mostly requirements on SPS standards on our goods going there,” he added.

Cristobal also said that both parties also discussed the whole tariff lines and identified specific products, particularly fisheries that are threatened by fish imports. This is in consideration since Norway and Iceland, big members of EFTA, have sensitivities in the fishery sector. The two states have big fishery industries and exporting salmon.

EFTA is composed of four wealthy European nations – Iceland, Liechtenstein, Norway and Switzerland.

According to DTI, 99.95 percent of the country’s on-agri imports from EFTA have MFN (non-ASEAN) tariffs not exceeding 15 percent. Importation, however, of these same products from Japan where the Philippines has existing bilateral FTA and from Australia and New Zealand where the Philippines has also an FTA deal via ASEAN carry only tariffs not exceeding 2 percent.

Also 84.52 percent of Philippine imports from EFTA have MFN applied tariffs not exceeding 15 percent.

A majority of the country’s exports to EFTA include electronic integrated circuits, semiconductors, artificial teeth, fresh or chilled fish fillets, prepared or preserved tuna, pneumatic tyres, traveling bags, t-shirts, jackets, bicycles, desiccated coconuts, crude coconut oil, pineapple juice, prepared or preserved pineapples, and raw cane sugar.

For the period 2011-2013, Philippine exports to the EFTA countries grew from $285 in 2011 to $404 million in 2012 and $307 million in 2013.

EFTA exports to the Philippines have been erratic from $300 million in 2011 to $370 million in 2012 and $385 million in 2013.

The DTI said that while the country’s exports to EFTA counts for a measly one percent of its total global trade, there is still room for significant improvements.

For instance, EFTA imports from the Philippines account for 2.78 percent of its total importation from ASEAN.

The Tariff Commission also showed potentially exportable products, those products imported by EFTA from ASEAN and rest of the world which are locally produced in the Philippines.

Some of these products include frozen fillets of tuna and catfish, crude palm oil, and its fractions, other footer with outer soles or upper of rubbers and plastics, motorcycles with reciprocating internal combustion, frozen shrimps and prawns, wheeled cashew nuts, coffee beans, preserved salmon and frozen crabs.

The government is also looking at products being imported by EFTA from world in bigger values that the Philippines is also exporting to EU. These are ballasts for discharge lamps or tubes, gear boxes and parts, safety airbags, mattress supports for bed frames, tobacco refuse, vinegar, fermented vinegar, smoking tobacco, glycerol, seaweeds and other algae, fruit juices or vegetables, jams, jellies and marmalades.

In terms of investments, EFTA countries have invested a meager 37.81 million in 2013 from a high of 13.81 billion in 2010.

Comparatively though, only 4.61 percent of EFTA investments in ASEAN goes to the Philippines,

The DTI, however, said that Switzerland has significantly improved its services commitments in its FTAs.

Already, both the Philippines and EFTA panels have conducted two rounds of FTA negations. The next third round is scheduled in September this year and the fourth round in November this year.

The DTI expects the bilateral FTA to be implemented before the end of President Aquino’s term in June, 2016.