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Philippines pursues free trade talks with European bloc

BusinessWorld | July 01, 2014

Philippines pursues free trade talks with European bloc

FORMAL TALKS for a free trade agreement (FTA) between the Philippines and the European Free Trade Association (EFTA) are expected to start this year, with Philippine officials noting “strong complementarities” between the economies of negotiating parties.

In a statement yesterday, the Department of Trade and Industry (DTI) said the Philippines and EFTA member countries — Switzerland, Iceland, Liechtenstein, and Norway — signed last June 23 a joint declaration of cooperation (JDC) that paves the way for free trade talks.

The department said the parties agreed in Reykjavik, Iceland, that “a scoping paper containing the principal terms of references for the scope and the process of the negotiations is due in September for consideration, with a view of launching negotiations before the end of 2014.”

Trade and Industry Secretary Gregory L. Domingo said the agreement “paves the way for enhanced relations between the Philippines and EFTA.”

“The opportunities for both sides are tremendous — the Philippines could benefit from the technologies of the EFTA states while EFTA stands to benefit from the economic growth story of the Philippines,” he said.

“[T]here appears to be a bright future for this agreement, hence, the Philippines would like to pursue it with vigor.”

DTI Undersecretary Adrian S. Cristobal, Jr. said in the same statement: “We have studied the possibilities and potential benefits of entering into a more active relationship with EFTA states and we believe that there are strong complementarities.”

Mr. Cristobal cited EFTA’s advanced manufacturing industries such as shipbuilding, iron and steel, auto and auto parts and components, aerospace, and pharmaceuticals.

He cited Norway’s shipbuilding and ship repair sectors, which could support the local industry’s goal of becoming a supplier of maritime equipment not just for the Philippines but for other Southeast Asian markets as well.

EFTA’s competitive aerospace industry would also help integrate the Philippines in the global supply chain and address gaps in the country’s supply chains, Mr. Cristobal said.

In return, the Philippines could provide EFTA with a “competitive supply of voice and non-voice service and IT (information technology) solutions... in banking, shipbuilding, precision engineering, pharmaceutical and chemical sectors,” he added. “Similarly, we see a significant export potential in creative services which includes editing, sound mixing, dubbing, animation and computer graphics.”

Philippine exports to EFTA countries reached $315 million last year, down 24% from $415 million in 2012, according to data on DTI’s Web site, which also showed EFTA exports to the Philippines growing 5.5% to $364 million from $345 million. — Daryll Edisonn D. Saclag

 source: BusinessWorld