Switzerland is optimistic that it can forge a free trade agreement with the Philippines this year.
“This is another step toward formalizing the economic relations, and we will have the first round of negotiations for free trade agreement between the Philippines and the European Free Trade Association [EFTA] [this year],” said Ivo Seiber, the Swiss Ambassador to the Philippines, during a roundtable discussion with editors of The Manila Times on Monday.
EFTA dates back to the 1950s and currently counts Switzerland, Norway, Iceland and Liechtenstein as members. Seiber said because the European Union grew larger, some original members of EFTA joined the EU. EFTA, however, cannot be considered “small,” according to Seiber.
The Swiss ambassador said consultations on the EFTA started two years ago, and the first meeting between trade and economic officials of Switzerland and the Philippines took place in June last year.
“We will start negotiating for a free trade agreement between EFTA and the Philippines,” Seiber added.
EFTA has free trade agreements (FTAs) covering 35 countries including Albania, Bosnia and Herzegovina, Canada, Central American States (Costa Rica and Panama), Chile, Colombia, Egypt, members of the Gulf Cooperation Council, Hong Kong-China, Israel, Jordan, South Korea, Lebanon, Macedonia, Mexico, Montenegro, Morocco, Palestinian Authority, Peru, Serbia, Singapore, member-states of Southern African Customs Union, Tunisia, Turkey and Ukraine.
Negotiations are ongoing with Algeria, India, Guatemala, Honduras, India, Indonesia, Malaysia, Russia, Belarus, Kazakhstan, Thailand and Vietnam. EFTA has concluded Joint Declarations on Cooperation with 17 of its trading partners, including Malaysia, prior to starting or concluding an FTA.
Seiber said even if EFTA is not as big as the EU, it nonetheless offers good economic and business opportunities for Filipino businesses.
“Switzerland [alone]as an export market is attractive,” he added.
The Swiss ambassador noted that trade between Switzerland and the EU is valued at $280 billion annually.
The envoy said EFTA’s gross domestic product is equivalent to 18 percent of the EU’s.
A statement from the Swiss Embassy in Manila showed the trade volume between Switzerland and the Philippines has been “rather modest.”
“However, double-digit growths in Swiss exports to the Philippines have been logged for the past four years, except in 2011 when it fell–10.5 percent given the slackening in global economic growth plus the massive appreciation of the Swiss franc at that time,” it said.
Total trade between the Philippines and Switzerland in 2013 amounted to 500 million Swiss francs, with Swiss imports to the Philippines amounting to 361.3 million Swiss francs or up 15.2 percent from 2012.
Meanwhile, Philippine exports to Switzerland amounted to 134 million Swiss francs, or up six percent from the previous year.
Major Swiss exports to the Philippines are pharmaceuticals, vehicles/aircraft, non-electric machines and watches, while major Philippine exports to Switzerland are traditional electric machines, non-electric machines, agricultural products and optical-medical instruments.
Seiber said Swiss businesses have a significant presence in the Philippines, among them well-known companies such as Roche, Zuellig, Nestle and SGS, among others.
Relations between Switzerland and the Philippines started 150 years ago.
Seiber said the Philippines could attract more investments if it addressed issues related to red tape, corruption, trade restrictions, lack of infrastructure and the legal system or how agreements are enforced in the country.
He remained optimistic that Switzerland will keep doing business in the Philippines because of the country’s large population.
“One hundred million people is a big market,” Seiber said.