Philippines-European Free Trade Association (EFTA) Free Trade Agreement (FTA)
Ministers and Representatives of the Philippines and the EFTA Member States signed the Agreement on 28 April 2016 in Bern, Switzerland. The Parties are currently undertaking their respective domestic processes for the ratification and entry into force of the Agreement. For the Philippines, DTI is undertaking necessary steps for the executive ratification (by the President) of the Agreement. The FTA will then be submitted to the Senate for its concurrence. Upon entry into force, the PH-EFTA FTA will be the country’s second bilateral FTA.
The PH-EFTA FTA covers Trade in Goods (TIG), Trade in Services (TIS), Investments, Intellectual Property (IP), Government Procurement (GP), Competition, and Trade and Sustainable Development.
Rationale for Engaging EFTA
The PH-EFTA FTA is part of the country’s strategy to gain stronger foothold in the European market. The Philippines’ Europe Strategy is to: (1) apply for and maximize preference under European Union (EU)Generalized Scheme of Preferences (GSP+) which provides for duty-free market access to 6,274 of EU tariff lines; (2) negotiate Philippines-EU FTA, building on the gains under GSP+ and provide for a framework to increase services trade and investments; and (3) pursue Philippines-EFTA FTA to expand market to non-EU member states.
While current PH-EFTA economic relations is small, there is large potential to expand trade and investment relations with EFTA. PH accounts for only 2.7% of EFTA imports from ASEAN in 2016 and 3.2% of EFTA’s total investments in ASEAN in 2015. Traded goods between the Philippines and EFTA are also non-competing.
Key Outcomes/Benefits for the Philippines
The FTA provides the Philippines duty-free market access for ALL industrial and fisheries tariff lines upon entry into force of the FTA; PH secured tariff concessions on substantially all PH agriculture exports to EFTA (e.g., Frozen tuna/mackerel, canned pineapple, crude coconut oil, fresh/dried bananas).
Under the FTA, the PH may qualify for zero tariffs for preparations of meat/fish, even if the meat or fish is imported. In addition, the PH also gained significant concessions on our agricultural exports, particularly those that are currently being exported to the EFTA Members States, or those with high potential export interest, including those that are being sold to its neighboring European countries, which can be alternately be exported to the EFTA countries.
Philippine service suppliers who want to enter the EFTA market can benefit from the commitments made by EFTA in all modes of supply. Commitments in cross border supply and movement of natural persons present opportunities for both skilled workers and professionals, particularly architects and engineers. For movement of natural persons, the entry and temporary presence of intra-corporate transferees (covering executives/managers and specialists) and business visitors will be allowed, and in some cases, the application of the economic needs tests will be waived. Switzerland in particular added an additional category of personnel in the form of installers and maintainers and includes the contractual requirement to develop local skills through training in the Philippines.
- Philippines-European Free Trade Association Free Trade Agreement (PH-EFTA FTA)
- Overview of the Agreement
- Trade in Goods
- Annex 1 – Rules of Origin
- Annex 2 – Product Coverage of Non-Agricultural Products
- Annex 3 – Philippines Schedule of Tariff Commitments on non-agricultural products
- Annex 4 – Export Duties
- Annex 5 – Trade in Fish and Other Marine Products
- Annex 6 – Trade Facilitation
- Annex 7 – Mandate Sub-Committee
- Annex 8 – Tariff concessions Agriculture Philippines – Iceland
- Annex 9 – Tariff concessions Agriculture Philippines – Norway
- Annex 10 – Tariff concessions Agriculture Philippines – Switzerland
- Trade in Services
- Annex 11 – Schedules of Specific Commitments
- Annex 12 – List of MFN Exemptions
- Annex 13 – Financial Services
- Annex 14 – Telecommunications Services
- Annex 15 – Movement of Natural Persons Supplying Services
- Annex 16 – Maritime Transport and Related Services
- Annex 17 – Energy Related Services
- Intellectual Property
- Trade in Goods
- EFTA Website
Source: EFTA TIR
For more details, contact the Bureau of International Trade Relations-Bilateral Relations Division (BITR-BRD) at BRD@dti.gov.ph