THE Philippines said it and the European Free Trade Association (EFTA) are working to improve utilization of their free trade agreement (FTA), which were 31% for the Philippines and 30% for the four-member EFTA bloc in 2020.
In a statement on Monday, the Department of Trade and Industry (DTI) said the decision to tap the trade deal more extensively was arrived at during the inaugural joint committee meeting on Jan. 10.
The EFTA consists of Switzerland, Norway, Liechtenstein, and Iceland.
The FTA was signed in April 2016 and came into force for the Philippines, Norway, Liechtenstein, and Switzerland in June 2018. The trade deal took effect in Iceland in January 2020.
“Over the 5 years of implementation, both sides have confirmed that the FTA is working well and has no critical implementation issues to date,” the DTI said.
“Both sides are determined to further improve their respective utilization rates,” it added.
The FTA with the four non-European Union countries was intended to tap non-traditional markets with high growth potential for trade and investment.
“This agreement facilitates increased market access, reduction of non-tariff barriers, trade and sustainable development, and protection of intellectual property rights among others, which we see as crucial for the Philippine economy,” Trade Secretary Alfredo E. Pascual said.
The DTI said total trade between the Philippines and EFTA was $953.58 million in 2021, against $821.81 million in 2020 and $821.41 million in 2019.
It added that the Philippines had a trade surplus with EFTA of $129.89 million in 2021, widening from the $101.49 million posted in 2020 and the $47.12 million reported in 2019.
The DTI valued the Philippine agricultural and industrial products entering the EFTA zone tariff-free at EUR24.84 million in 2020. These products include tuna, desiccated coconut, fruit and nuts, processed food and food preparations, malt products, vacuum cleaners, new pneumatic tires, and hairdressing apparatus.
“The Philippine market does not compete and is complementary in nature to the EFTA market. As such, the Philippines was able to secure duty-free market access for all industrial and fisheries exports to EFTA and significant concessions on major agricultural products through the FTA,” Trade Undersecretary Ceferino S. Rodolfo said.
The DTI said that EFTA countries also helped increase foreign direct investment (FDI) entering the Philippines, adding that more FDI is expected following recent economic reforms such as the opening up of renewable energy projects to 100% foreign ownership.
“From 2018 to the third quarter of 2022, investment promotion agencies approved Swiss investments totaled P1.40 billion (or $25.865 million) in the following sectors: manufacturing, real estate activities, administrative and support activities,” the DTI said.
“From 2018 to the second quarter of 2022, investments from Norway, Iceland, and Liechtenstein also amounted to P229.4 million (or $4.23 million) in the financial and insurance industries, and the manufacturing, administrative, transportation, and storage sectors,” it added. — Revin Mikhael D. Ochave