DTI seeks improved benefits from free trade agreements
BusinessWorld | May 15, 2011
DTI seeks improved benefits from free trade agreements
THE TRADE department aims to double the utilization rate of the country’s free trade agreements (FTAs) to 50% in five years as the government begins its efforts to strike a trade deal with the European Union (EU).
"Our current utilization rate for all free trade agreements is around 24%-25%, but we plan to double that to around 50% by 2016," Adrian S. Cristobal, Jr., Trade undersecretary for international trade, said at the Department of Trade and Industry (DTI) press conference yesterday.
Utilization rate — defined as the value of exports receiving preferential treatment relative to the total value of exports into partner economies — has been low among exporters, Mr. Cristobal admitted.
"We have been conducting information seminars on FTAs to increase awareness among exporters as part of our goal to increase utilization rate," the Trade official told reporters.
"This is an important issue now, because we are preparing for a potential trade agreement with the EU, which is one of our top foreign direct investment sources and our top export venue," he continued.
Although the government has yet to come up with concrete plans for advancing the country’s trade and investment interests, officials announced that discussions with the bloc have already begun.
"I have already spoken with (European trade commissioner) Karel De Gucht on a potential FTA with the EU during the ASEAN summit, but we also want to consult with various parties such as the congress and private sector groups on how we can benefit from it," Trade Secretary Gregory L. Domingo said.
The Trade department has already started its series of consultations with the public and stakeholders on the possibility of a preferential trade agreement between the Philippines and the EU.
"We want to institutionalize a participatory and sustained consultative mechanism with our stakeholders. The idea is for the government, business community, and the civil society to commit to a set of principles and guidelines on the consultation process. Hopefully, this initiative will deepen our strategic partnership with our constituents from policy making to trade negotiations," Mr. Cristobal earlier said.
The DTI-led consultations will recommend actions to the national leadership with respect to Philippine trade agreements.
"These consultations are important so we can enhance Philippine-EU trade and investment relations. At the core of these activities is our commitment to uphold transparency in all of our negotiations and advance a trade agenda that promotes economic growth, sustained development, and poverty reduction," Mr. Cristobal said.
The Philippine Chamber of Commerce and Industry (PCCI) has already expressed its support to the planned Philippine free trade deal with the EU, citing likely niches in fisheries, natural ingredients, metal castings, and information technology. Others are fruits and vegetables, garments, and home decorations.
"We cannot afford to lose out among our competitors in the region who are already actively pursuing trade talks with the EU," PCCI treasurer Donald Dee earlier said.
Industry data showed that Philippine exports to the EU in 2009 represented 20.56% of total Philippine exports to the world, while EU imports accounted for 7.61% of Philippine imports.
The top Philippine EU markets are the Netherlands, Germany, Belgium, United Kingdom, France, and Italy. Last year, Philippine exports to the EU amounted to $7.3 billion.
Data from a study called Universal Access to Competitiveness and Trade conducted in 2009 showed that EU investments constituted 22% of all investments into Southeast Asia between 2006 and 2008.
EU tourists accounted for 11% of Asean arrivals (2004-2007), the largest share of any nationality. EU also dominates world services trade in transportation, construction, commercial services, and professional services, among others.
Within Southeast Asia, Singapore and Malaysia are negotiating trade agreements with the EU while Vietnam has given the political signal to launch trade negotiations with the EU. — Eliza J. Diaz
