THE free trade agreement (FTA) between the Philippines and European Free Trade Association (Efta) member states—Switzerland, Norway, Liechtenstein and Iceland has been working well with no critical implementation issues since the FTA’s implementation five years ago.
Both are currently enjoying preferential utilization rates of 31 percent for the Philippines and 30 percent for Efta member states, according to the Department of Trade and Industry and both sides are “determined to further improve their respective utilization rates.”
In fact, a PH-Efta FTA online interactive web tool was unveiled to help Philippine and Efta exporters maximize their preferences under the FTA.
“We are privileged to be the Efta’s first recipient partner of this online web tool to promote the PH-Efta FTA. This will really benefit the Philippines and Efta business community,” said Trade Undersecretary Ceferino Rodolfo in a statement.
The PH-Efta FTA opened the gate for Efta’s high-income market for premium and niche Philippine products when it entered into force in June 2018.
The FTA with Switzerland, Norway, Iceland and Liechtenstein is part of government efforts to tap non-traditional markets with high potential for growth in trade and investments and forms part of the broader strategy to gain a stronger foothold in the European market.
PH posts trade surplus
In 2019, the Philippines posted a trade surplus of US$47.12 million. This surplus further grew to $101.49 million in 2020 and $129.89 million in 2021 despite the Covid-19 pandemic.
Total trade between the Philippines and Efta likewise increased by 2.40 percent from $802.150 million in 2018 to $821.407 million in 2019. This further improved by 16 percent from $821.81 million in 2020 to $953.58 million in 2021.
“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, particularly those Philippine products to the Efta member states such as desiccated coconut, prepared or preserved pineapples and raw cane sugar; and with high potential export interest,” said Rodolfo.
With the FTA in place, in 2020, around euro 24.84 million worth of Philippine agricultural and industrial products were able to enter the Efta market with reduced or zero tariff rates. These Philippine products include tunas, desiccated coconuts, fruits and nuts, processed foods and other food preparations, pasta, malt products, vacuum cleaners, new pneumatic tires and hairdressing apparatus.
On the investment front, Switzerland has been the country’s major partner in Efta and a regular source of foreign investments in the European
region.
From 2018 to the third quarter of 2022, IPA-approved Swiss investments totaled P1.40 billion ($25.865 million) in the following sectors: manufacturing, real estate activities, administrative and support activities.
From 2018 to the second quarter of 2022, investments from Norway, Iceland and Liechtenstein also amounted to P229.4 million ($4.23 million) in the country’s financial and insurance, manufacturing, administrative, transportation and storage sectors.
Trade exchange with Switzerland
Earlier, Switzerland Ambassador to the Philippines Alain Gaschen paid a visit to Cebu in October 2022, to encourage Cebuano exporters to maximize and increase the country’s trade exchange with Switzerland through Efta.
Gaschen said trade between the Philippines and Switzerland remains modest with more room for improvement.
He said Swiss companies are now back in business and are now eager to do business in the Philippines.
Kent Marjun Primor, commercial attaché of the Embassy of Switzerland, encouraged Cebuano exporters to look at Switzerland as their entry point to sell to the rest of the European countries.
“There really is a big opportunity for both countries to grow trade,” he said, adding that companies wanting to penetrate Switzerland and the rest of the Efta states should also consider getting certifications for their products to gain better market acceptance and position them well in the foreign market.