Tuesday, July 1, 2014
Following a series of high-level meetings between the Philippines and the European Free Trade Association (EFTA), the formal signing of the Joint Declaration on Cooperation (JDC) was held last week in Reykjavik, Iceland.
The JDC was signed by Trade and Industry Secretary Gregory L. Domingo on behalf of the Philippines while the EFTA side was represented by Mr. Gunnar Bragi Sveinsson, Minister of Foreign Affairs and External Trade of Iceland; Mr. Norbert Frick, Ambassador and Permanent Representative to the UN and other International Organisations in Geneva; Ms. Monica Mæland, Minister of Trade and Industry of Norway; and Mr. Johann N. Schneider-Ammann, Head of the Federal Department of Economic Affairs, Education and Research of Switzerland.
“Today is a milestone in our bilateral relations. The JDC paves the way for enhanced relations between the PH and EFTA. The opportunities for both sides are tremendous—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.
Domingo likewise stated that the Philippines would like to explore ways to increase the market share of Philippine trade and investments from EFTA member countries in cadence 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.
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.
“Noting the vast potentials of our bilateral relations, the Philippines has been reaching out more to EFTA just as our 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,” said Industry Development Undersecretary Adrian Cristobal Jr.
“EFTA’s strengths in shipbuilding, iron and steel, auto and auto parts and components as well as aerospace, IT-BPM, and pharmaceuticals are areas where we can explore cooperation initiatives. For example, Norway’s shipbuilding and ship repair industry can be explored to support our local industry’s goal to develop a maritime equipment industry which can supply domestic and ASEAN requirements,” said Cristobal, the country’s lead trade negotiator.
Cristobal also said that the JDC could help facilitate business contacts, particularly aerospace original equipment manufacturers (OEM) that will help the country integrate in the global supply chain and address supply chain gaps.
Other areas of cooperation with EFTA Member States are in the areas of IT and IT-enabled services, creative services, financial services, tourism services, educational services, architectural/engineering services, maritime transport and energy services.
“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 said.
EFTA Member States have strong industries in banking, insurance, maritime transport, telecommunication, energy, tourism and travel services. They are also among the economies with the highest GDP per capita. Liechtenstein has the second highest GDP per capital in the world valued at USD 89,400 while Switzerland, the largest market among the EFTA member states, has a GDP per capita of USD 54,800, and ranks 11th in the economies with the highest GDP per capita.
The JDC was formed on the principles of the recognition of different levels of development and the corresponding need for flexibility among states. It adheres to human rights, democracy, sustainable development, corporate governance, and corporate social responsibility and recognizes World Trade Organization (WTO) commitments as building blocks of the declaration.
The meeting at the level of chief negotiators of the Philippines and EFTA member states followed the signing. It discussed the process towards 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.
EFTA’s global network of preferential trade agreements outside the EU currently comprises 25 agreements with 35 countries and territories. Seven joint declarations on cooperation complement this network.