Business & Economy

PH eyes free-trade deal with EU

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The Philippines is hoping to start by early next year the formal negotiations with the European Union on a free-trade agreement (FTA), a move that will dovetail with the country’s aggressive thrust toward further solidifying its ties with Europe.

Trade Assistant Secretary Ceferino S. Rodolfo said they were waiting for the so-called “mandate to proceed” from Malacañang, the go-ahead for Philippine trade officials to enter into formal negotiations with the 28-member bloc. If the mandate comes in within the month, actual negotiations could start within the first quarter of 2016, he added.

Last week, the European Chamber of Commerce of the Philippines (ECCP) stressed the significance of signing a FTA with the EU, but had also cited the need for the government to undertake certain actions to help ensure a faster, smoother flow in negotiations.

“The Philippines will have to accede to certain treaties and conventions, for example, on public procurement. We also still need to see the Competition Law coming into effect with the implementing rules and regulations to make the country more interesting and more aligned with international conventions,” said ECCP vice president Erik Moller Nielsen.

“We should not forget that countries around us are also concluding [FTAs] all the time. We cannot afford to stand still. We saw the same recently in the Ease of Doing Business [Index] where the Philippines slipped [in its rankings]. So, has it become harder to do business here? No, not really. But it’s just that other countries are always modernizing rules, making it easier for investments and foreign companies to come in and do business. [Other countries] will race ahead of us if we do not continue our reforms,” Nielsen explained.

The Philippines and the EU are still considered within the scoping stage, which will enable both sides to agree on a common idea on what they want to get out of the FTA, and the sectors that will be covered by the agreement. Once the scoping exercises are concluded, the two parties can then launch the formal negotiations on an FTA.

An FTA is expected to help boost trade and investment ties between the two parties. As it is, total trade in goods and services between the EU and the Philippines reached a historic high of P15.6 billion as of end-2014, buoyed largely by the country’s robust economic growth and the continued strong bilateral ties between the two parties.

According to the EU, trade in goods between the 28-member bloc and the Philippines grew 16 percent to P12.5 billion, while trade services rose 17 percent to P3.1 billion. The “impressive” trade flows had reportedly put the EU at par with the United States as the country’s third-biggest trading partner next to Japan and China.

The Philippines has so far signed seven free trade agreements, only one of which was bilateral and the remaining six are through the Asean. These are the Asean FTA; Asean-China FTA; Asean-Korea FTA; Asean-Australia-New Zealand FTA; Asean-Japan Comprehensive Economic Partnership Agreement; Philippines-Japan Economic Partnership Agreement (PJEPA), and the Asean-India FTA.

Meantime, the European Free Trade Association (Efta) is willing to provide highly favorable concessions for Philippine agricultural and fisheries products under a proposed free trade agreement, as based on the fourth round of negotiations held last month.

The Philippine panel, led by Trade Undersecretary Adrian S. Cristobal Jr., reportedly saw a huge interest in the country’s tropical fruits, tuna, and other high value added products from the four member states of Efta, namely Switzerland, Norway, Iceland and Liechtenstein.

“They were offering us good concessions for our agricultural goods, considering that Efta is protective of its own agriculture sector. Efta didn’t provide these kinds of concessions to other partners but they opened it to us,” Rodolfo said.

He explained that this might be due to the fact that the agricultural products coming from the Philippines and Efta countries were different and complementary. Among the products mentioned during the negotiations in Geneva included canned tuna; processed tropical fruits (juices, canned), and other high value-added products like coconut water and coconut sugar. Also mentioned in the talks were aquaculture feeds, which the country is already supplying to some countries in Europe.

“Efta is a big user of aquaculture feeds and we supply that to Europe. I think [Philippine suppliers] can already supply to Efta countries since they have the same standards and logistics requirements as Europe,” he added.

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