PH signs joint declaration on cooperation with EFTA

MANILA, Philippines – Trade Secretary Gregory Domingo signed an agreement that would enable the Philippines to trade freely with countries comprising the European Free Trade Association (EFTA).

EFTA member states are also among the economies with the highest Gross Domestic Product (GDP) per capita. Liechtenstein has the second highest GDP per capital in the world valued at $89,400, while Switzerland, the largest market among the EFTA member states, has a GDP per capita of $54,800, and ranks 11^th in the economies with the highest GDP per capita.

The agreement involves tapping on some of Europe’s strong industries such as shipbuilding, iron and steel, automotive and automotive parts and components, and aerospace and information technology-business process management (IT-BPM).

Following a series of high-level meetings between the Philippines and the EFTA, the formal signing of the Joint Declaration on Cooperation (JDC) was held June in Reykjavik, Iceland.

The JDC aims to enhance economic cooperation between the Philippines and members of the EFTA. EFTA member states include Norway, Switzerland, Iceland, and Liechtenstein. Through the JDC, EFTA and the Philippines commit to further enhancing their bilateral economic relations and look forward to examining possibilities of establishing free trade relations. 

“The Philippines could benefit from the technologies of the EFTA states while EFTA stands to benefit from the economic growth story of the Philippines. We welcome the signing of the JDC; there appears to be a bright future for this agreement hence the Philippines would like to pursue it with vigor,” Domingo cited in his opening statement.

The meeting at the level of chief negotiators of the Philippines and EFTA member states followed the signing. It discussed the process toward free trade negotiations between the two sides. The parties agreed that a scoping paper containing the principal terms of references for the scope and the process of the negotiations is due in September for consideration with a view of launching negotiations before the end of 2014.

Increasing market share

The Philippines would like to explore ways to increase the market share of Philippine trade and investments from EFTA member countries in relation with its ASEAN neighbors.

Vietnam was EFTA’s largest import source in ASEAN with 30.26% market share based from EFTA’s total ASEAN imports from 2008-2012.

Meanwhile, Singapore already has an existing free trade agreement (FTA) with EFTA while Vietnam, Thailand, Malaysia, and Indonesia are in the process of negotiating an FTA.

“Noting the vast potentials of our bilateral relations, the Philippines has been reaching out more to EFTA just as our Association of Southeast Asian Nations (ASEAN) neighbors are doing.  We have studied the possibilities and potential benefits of entering into a more active relationship with EFTA states and we believe that there are strong complementarities,” Trade Undersecretary Adrian Cristobal Jr. said.

EFTA’s robust industries are areas where the country can explore cooperation initiatives, Cristobal added.

For example, Norway’s shipbuilding and ship repair industry can be explored to support the local industry’s goal to develop a maritime equipment industry, which can supply domestic and ASEAN requirements, he explained.

The JDC could also help facilitate business contacts, particularly aerospace original equipment manufacturers (OEM) that will help the Philippines integrate in the global supply chain and address supply chain gaps.

Other areas of cooperation with EFTA member states are IT and IT-enabled services, creative, financial, tourism, educational, architectural/engineering, maritime transport, and energy services.

Specifically, the Philippines has a competitive supply of voice and non-voice services and IT solutions to EFTA member states in the sectors of banking, shipbuilding, precision engineering, pharmaceutical and chemical sectors.

“Similarly. we see a significant export potential in creative services which includes editing, sound mixing, dubbing, animation, and computer graphics,” Cristobal cited.

EFTA’s global network of preferential trade agreements outside the European Union currently comprises 25 agreements with 35 countries and territories. Seven joint declarations on cooperation complement this network. – Rappler.com

(Editor’s Note: In a previous version of this story, we put “Free Trade Agreement” in the title instead of “Joint Declaration on Cooperation.” This has been corrected in this version.)