The Philippines will start by March 2015 the first round of negotiations for a free trade agreement with the European Free Trade Association (Efta).
The move is aimed at further broadening and strengthening the country’s bilateral trade and investment relations with more European states.
Raoul Imbach, counselor and deputy head of mission at the Embassy of Switzerland, said the first in the series of discussions would be held in Manila on March 23, roughly three months following the conclusion of the scoping exercises between the Philippines and Efta.
Efta is composed of Switzerland, Norway, Iceland and Liechtenstein.
“Both sides are preparing for the negotiations. Under the system, a chief negotiator representing Efta will have to be appointed by the Efta Secretariat in Geneva,” Imbach said.
“Efta is ready to conclude (the FTA negotiations) as soon as possible. It will mostly depend on the Philippines. We understand the Philippines is also eager to have this negotiations completed under this administration, so we’re hoping that beginning 2016, we will already have it,” he said.
Based on the Efta’s experience, the shortest negotiation period for an FTA, from the time the actual talks started up to the time it was signed, was roughly a year. But the length of the negotiations would depend on the countries involved, their economic considerations as well as political situations.
If this deal is closed, the FTA with the Efta will be the second bilateral agreement to be entered into by the Philippines.
Trade Secretary Gregory L. Domingo, for his part, said the DTI was also targeting to complete the discussions within a year or by March 2016.
“It would be good if we could finish it before March 2016—that’s a very tight schedule, a very ambitious schedule, but still doable. It will really depend on what happens during the negotiations. If there aren’t too many issues, then maybe we can have the FTA by then. It will be difficult if we encounter issues,” Domingo explained.
Domingo earlier admitted that the Efta was a small market but the benefits to the Philippines to have an FTA with the bloc will be highly significant.
These countries are considered strategic trading and investment partners for the Philippines given their extensive networks of preferential trade relations worldwide.
In addition to the European Union as the Efta states’ most important economic partner, Efta’s network of free trade agreements currently extends to 35 countries, and more free trade negotiations are underway.
Investments may also be expected from Efta members, which are considered “rich countries.”
Norway, for instance, has the world’s biggest sovereign wealth fund.
The Department of Trade and Industry is wooing manufacturers from Switzerland, Norway, Iceland, and Liechtenstein to integrate Philippine firms in these countries’ global supply chains.
Increased collaborations are being targeted in shipbuilding, iron and steel, auto and auto parts and components as well as aerospace, IT-BPM, and pharmaceuticals area.
As of the end of 2013, the value of Efta-Philippines’ total merchandise trade amounted to $633 million.
Efta states exported goods to the Philippines worth S440 million, composed mainly of pharmaceutical products, aircraft and machinery.
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