The Philippines-EFTA FTA has a comprehensive coverage, including trade in goods, sanitary and phytosanitary measures, technical barriers to trade, trade in services, investment, competition, protection of intellectual property, government procurement, trade and sustainable development, institutional provisions, and dispute settlement.
Signed on April 28, the pact builds on a joint declaration on cooperation signed by the Philippines and the EFTA states in the Westman Islands, Iceland in June 2014. Negotiations were launched in March 2015 and concluded in February 2016.
The FTA was signed in Switzerland by Philippine Trade and Industry secretary Adrian S. Cristobal Jr.; Switzerland President and head of the Federal Department of Economic Affairs, Education and Research of Switzerland Johann N. Schneider-Amman; Iceland ambassador Martin Eyj?lfsson; Minister of Foreign Affairs of Liechtenstein Aurelia Frick; and State Secretary of the Ministry of Trade, Industry and Fisheries of Norway Dilek Ayhan.
Trade in goods
In trade in goods, EFTA will abolish all customs duties on imports of industrial products, including fish and other marine products, originating in the Philippines.
?The Philippines will gradually eliminate customs duties on industrial products, including fish and other marine products, originating in an EFTA State,? according to the EFTA website.
Some fish and other marine products are excluded from tariff elimination or reduction, however.
The agreement also provides for tariff concessions on both basic and agricultural products, as well as seeks to facilitate trade in fish and other marine products.
It also mandates abolishing export duties, ?however, the Philippines (has) kept the possibility for such duties for logs, as set out in Annex IV,? EFTA states.
The agreement also provides for liberal rules of origin based on the European model, and an annex covers the rules of origin and methods of administrative cooperation between customs authorities.
?The rules open up for accumulation with all types of products (industrial and agricultural) among the Parties as well as for the possibility of self-declaration of origin,? EFTA said.
The agreement also contains detailed provisions on trade facilitation, including some ?WTO +? provisions, while opening up for advance rulings and limiting the possibility of new fees and charges.
Trade in services
As for trade in services, the FTA closely follows the World Trade Organization (WTO) General Agreement on Trade in Services approach and covers trade in all services sectors under all four modes of supply.
Other provisions pertain to procedures for movement of products, border control, market surveillance, and conformity assessment procedures. The provisions further ensure stable and transparent conditions by encouraging the use of international standards, setting up a low-threshold consultation mechanism, as well as ensuring the possibility to review the chapter in the future.
According to a separate release by the Department of Trade and Industry (DTI), the agreement will enter into force once the necessary internal procedures are completed for ratification by the parties. A joint committee will oversee the implementation of the FTA.
Strong stimulus to bilateral trade
DTI said the FTA is an important step in further strengthening the close and significant economic relationship between the Philippines and EFTA.
The preferential market access and the rules and disciplines governing the economic relations between the parties under the FTA will supplement the economic cooperation and exchanges in the joint declaration on cooperation, thus providing a stronger stimulus for the further development of trade and investment.
Philippines-EFTA merchandise trade has increased at an average annual rate of 11% between 2005 and 2015, said DTI. In 2015, total bilateral merchandise trade was valued at US$863 million, with EFTA?s exports amounting to $407 million and exports from the Philippines reaching $456 million.
EFTA?s key exports were pharmaceuticals, clocks and watches, and machinery, while its imports mainly consisted of precious metals, electrical machinery, and medical instruments.
DTI noted that the Philippines is amongst the fastest and most resilient economies in Asia with over 100 million consumers. The country ranks 37th in merchandise trade and 21st in commercial services trade, and has preferential trade agreements with the ASEAN member States, Japan, China, South Korea, Australia, New Zealand, and India.
Meanwhile, with a combined population of over 13 million and a combined GDP of $1.2 trillion, the EFTA states are the world?s ninth largest merchandise trader and the fifth largest trader in commercial services, as well as significant actors in foreign direct investment. They now have 27 FTAs with a total of 37 partners outside the European Union.?