logo logo

Philippines to pursue two FTAs in Europe

Business World, Philippines

Philippines to pursue two FTAs in Europe

By Daryll Edisonn D. Saclag

3 November 2013

The Government is sending a team to Europe later this month for talks about possible free trade agreements (FTA) with two European blocs, a Trade official said last week.

"We will be sending a delegation to Europe third or fourth week of November to continue technical discussions on a possible Philippines-EU (European Union) FTA in Brussels and Philippines-EFTA (European Free Trade Association) FTA in Geneva," Trade Undersecretary Adrian S. Cristobal, Jr. told reporters last week.

Mr. Cristobal said the Philippines is still at the scoping stage, or determining which sectors will be part of an FTA, with the 28-member European Union.

Talks about a possible trade agreement between the Philippines and the EU first began on Feb. 9, 2009, after the latter’s plan of pursuing a region-to-region approach with the ten-member Association of Southeast Asian Nations (ASEAN) failed due to the political difficulties of negotiating an FTA that included Myanmar.

ASEAN groups the Philippines, Singapore, Malaysia, Indonesia, Thailand, Brunei, Cambodia, Myanmar, Vietnam, and Lao PDR.

Singapore is the first ASEAN country to conclude an FTA — signed December 2012 — with the EU.

The EU is also currently negotiating FTAs with Malaysia, Vietnam, and Thailand.

For the EFTA, Mr. Cristobal said the mission will continue to explore the benefits of forging an FTA with the four-member economic bloc composed of Switzerland, Liechtenstein, Iceland, and Norway.

The Trade official earlier said that talks about a possible trade pact with EFTA began during the World Trade Organization Ministerial Conference in Geneva, Switzerland in 2011 but was "fast-tracked" by the visit to the Philippines of Swiss State Secretary for Economic Affairs Marie-Gabrielle Ineichein-Fleisch in June.

Trade Secretary Gregory L. Domingo and Ms. Ineichen-Fleisch signed in June a memorandum of understanding to start dialogues for a potential FTA between the two countries which, if approved, could be the Philippines’ first such agreement with a European country.

Currently, the Philippines has only one bilateral FTA, the Japan-Philippines Economic Partnership Agreement.

However, as an ASEAN member, the Philippines also enjoys the bloc’s trade agreements with Japan, China, South Korea, Australia, New Zealand, and India.

Meanwhile, Mr. Cristobal said that the market share of garments, electronics, and furniture exporters, among others, will be reduced should the Philippines remain outside the US-led Trans-Pacific Partnership agreement (TPP).

"If we’re not going to be part of the TPP, our neighbors — Vietnam, Malaysia, and Brunei — will get preferential tariff for their goods, and our market share will be diminished," he said.

"We cannot afford not to be part of that agreement. If and when they open a second batch of members, we intend to be part of that second batch. We’ve been doing consultations and we’re going to commission specific impact studies," he added.

In April, the government said the country is not yet ready to join the TPP given structural limitations and will require changing the country’s laws.

"We’re not yet ready for the TPP, we have to do some more homework first on our environment, labor and investment, on the equity side because we have many restrictions," Mr. Domingo had earlier said.

Negotiations are ongoing for the establishment of the TPP, which aims to further liberalize trade in the Asia-Pacific region. Twelve countries — Australia, Brunei, Chile, Japan, Malaysia, New Zealand, Peru, Singapore, Vietnam, and the US — are currently in talks to form the TPP, which are slated to be concluded by year’s end.

The trade pact, once it materializes, would cover two-fifths of the world economy. —