Trade chief tells Filipino exporters to use FTAs wisely

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FILIPINO exporters should take advantage of various trade agreements involving the Philippines in winning potential markets, the country’s trade chief said.

Speaking at Philexport Cebu’s general membership meting on November 25, Department of Trade and Industry (DTI) Secretary Ramon Lopez identified the free trade arrangements (FTA), which the Philippines, as an Asean member country, can use to expand their export markets. Among these he said include Asean’s FTAs with China, Japan, Korea, India, Australia and New Zealand (NZ).

The country also has a bilateral agreement with Japan and recently signed an FTA with the European Free Trade Association (EFTA) composed of Iceland, Liechtenstein, Norway, and Switzerland; this is now awaiting ratification. The Philippines is also a beneficiary of the Generalized Scheme of Preferences (GSPs).

“All these mechanisms provide market access for Philippine goods and services and entitle us to zero tariffs on most products,” Lopez said, adding that among the signed FTAs, the Asean-China FTA (ACFTA), in place since 2004, has so far the biggest consumer market with 1.93 billion consumers.

ACFTA has also guaranteed zero tariffs for about 7,500 Philippine products, including bananas, copra oil, mineral oils and fuels, selenium, industrial fatty alcohol, copper, machinery and mechanical appliances, and vehicles including parts and accessories.

Differentiate, innovate, diversify

Besides encouraging exporters to take advantage of FTAs, the trade chief emphasized the importance of continuing market-relevant differentiation, unique selling proposition and inclusive innovation, anchored on the country’s areas of strengths. According to Lopez these are the factors that will fortify the country’s mark in the global market.

Lopez cited that the country’s top three export markets in 2015 were Japan, China and the US, which comprised 47 percent of total Philippine exports even as he discussed the need to diversify the country’s export markets. Also in the top 10 were Hong Kong, Singapore, Germany, Korea, Thailand, Taiwan and the Netherlands.

Lopez said that the Philippine Export Development Plan (PEDP) 2015-2017 addresses the need to diversify and expand export markets, which has become even more imperative today in view of the challenges posed by Asean integration.

“The government is committed to provide better macro environment,” he said.

PH-China prospects

Lopez also shared that as a result of President Rodrigo Duterte’s recent visit to China, new export potential in China is expected to increase from $17 billion to $60 billion in five years. The country also managed to close contracts to export fruits to China amounting to some $100 million.

He also mentioned that the Chinese government has already lifted its ban on Philippine companies, 20 of them exporting bananas and seven exporting mangoes to China. In 2015, the country exported 448,000 metric tons of bananas to China valued at $157.5 million.

China is also looking at increasing its imports from the Philippines particularly of such high value commercial crops like mango, coconut and dragon fruit, as well as high-end fishery products, including lapu-lapu, crabs, shrimps, prawns and tuna.

PH-Russia, other prospects

Philippine exporters can also benefit from Russia’s GSP which covers about 2,800 goods including meat, fish, fruits and vegetables, coffee, cocoa, rice, coconut oil and processed foods, Lopez said.

During the most recent bilateral discussions between President Duterte and Russian President Vladimir Putin, on the margins of the Asia-Pacific Economic Cooperation (APEC) meeting in Peru, Russia committed to buy up to $2.5-billion worth of Philippine fruits, grains or vegetables in the next 12 months.

The Philippines is also a beneficiary country of other GSP programs such as those with Australia, Belarus, Canada, the European Union (EU), Japan, Kazakhstan, New Zealand, Norway, Switzerland, Turkey and the United States (US).

In December 2014, the EU included the Philippines in its GSP+ scheme, which guarantees zero tariffs to 6,274 products. In 2015, the US reinstated its GSP, eliminating duties on about 5,000 Philippine products.

Lopez also flagged possible market openings that other FTAs—which the country is currently negotiating—may bring, including the Regional Comprehensive Partnership Agreement (RCEP) among Asean and its six partner-economies namely China, Japan, Korea, India, Australia and NZ, as well as the Philippines-EU FTA.

“Our concerted efforts must always be focused on a single direction, which is to help our country achieve global competitiveness, consistent with President Duterte’s 10-point socio-economic agenda,” he said.

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