By John Benedict Santos | DTI-EMB Market Innovation Division (MID)
Sitting right in the middle of Europe just beside France, Switzerland is known for its lakes, villages, and the cold peaks of the Alps. While being more famously recognized for its chocolate and yodeling, Switzerland is known in the global trade as the world’s gold hub as Swiss refineries process 70% of the unrefined gold mined in the world each year. To emphasize this huge sector, the Swiss gold business is worth US$70-90 Billion depending on the year. The Philippines has taken advantage of this opportunity with unwrought gold being its top export product to the country in 2019.
Unbeknownst to many, Switzerland and the Philippines has improved its partnership with Switzerland as one of its top trading partners in Europe. This partnership has strengthened with the ratification of the European Free Trade Association (EFTA), the second bilateral free trade agreement of the country, with the EFTA markets – Switzerland, Iceland, Norway, and Liechtenstein with the support of the Swiss Import Promotion Programme’s (SIPPO) market study on Processed Food, Natural Ingredients, and Natural Fiber and Textiles currently being undertaken and are seen to boost Philippine exports of these products to Switzerland and other markets in Europe.
Philippine Trade with Switzerland and the European Free Trade Association
In 2019, Switzerland was the Philippines 28th trading partner valued at US$771.45 million. Exports was valued at US$417.29 million while imports were valued at US$354.16 million. Top Philippine exports to Switzerland in this period were other unwrought gold, non-monetary while the top food exports of the Philippines are yellowfin tunas. Philippines has been largely competitive with Switzerland with a balance of trade valued at US$63.12 million.
Switzerland is a member of the European Free Trade Association (EFTA) comprised of Iceland, Liechtenstein, Norway, and Switzerland and was established during the Stockholm Convention in 1960. EFTA Nations has a total landmass of 529,600 square kilometers and a combined estimated total population of 14,260,000. Its combined GDP is estimated at US$1.0 Trillion. As a block, Philippine exports to EFTA was valued at U$433.81 million while imports were valued at US$384.19 million in 2019.
Partnership with SIPPO
A Tripartite Memorandum was signed by Swisscontact, the Department of Industry-Export Marketing Bureau (DTI-EMB), and the Embassy of Switzerland in the Philippines to implement the SIPPO, which is expected to be completed in December 2020. SIPPO is an initiative of the Swiss State Secretariat for Economic Affairs (SECO), which aims at integrating developing and transition countries into world trade. SIPPO is implemented by Swisscontact, a longstanding Swiss non-government organization (NGO) promoting inclusive economic, social, and ecological development.
The DTI-EMB and Swisscontact are conducting a market study on three key export products of the Philippines, namely, Processed Food, Natural Ingredients, and Natural Fiber & Textiles. This market study endeavors to strengthen the Philippine trade with the EFTA in general and Switzerland in particular. Furthermore, the market study aims to learn EFTA markets’ trade regulation, market access requirements, and market demand. It will also determine the unique selling position of Philippine products in their market and acquire information on potential importers.
“The results of this study will guide our exporters, especially the MSMEs in the sectors of processed food, natural ingredients, and natural fibers, on how to effectively promote their products in these markets thus enabling them to maximize the benefits of our bilateral free trade agreement with EFTA,” said DTI-EMB Director Senen Perlada.
The project is an example of close economic cooperation with Switzerland, which has been intensified over the years. Since 1 June 2018, the EFTA-Philippines Free Trade Agreement provides preferential treatment for trade in goods and services.
Philippine companies that are interested in exporting to Switzerland and other EFTA nations can contact the DTI Export Marketing Bureau at exports@dti.gov.ph or thru its Market Innovation Division at mid@dti.gov.ph and EFTA market officer JohnBenedictSantos@dti.gov.ph. ♦
Date of Release: 27 September 2020
