Transcript Preliminary Findings: RP

Overview of EU-RP Economic
Relations
EU negotiating mandate for
the ASEAN-EU FTA
 Main principle: most comprehensive and ambitious
degree of liberalization in goods, services and
investments
 FTA as venue to tackle provisions not ready for
multilateral discussion and consensus (e.g.
competition policies,government procurement,
investments, trade facilitation)
 Recognizes divergent characteristics of parties (EU
and ASEAN, and within ASEAN)
EU negotiating mandate for
the ASEAN-EU FTA
Nature and Scope of Agreement
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Trade in goods
Services
Public procurement
Trade and Competition
Intellectual, Industrial and Commercial Property Rights
Capital payments and movement
Customs and trade facilitation
Trade and Sustainable Development
Transparency in trade regulations
 Institutional Framework and Final Provisions
Nature and scope of EU
mandate on ASEAN-EU FTA
Trade in goods
 Removal of import duties and charges for both sides within ten years
(with transitional period for ASEAN Members)
 Longer time period for minimal number of sensitive products
 Removal of all NTBS,; Harmonization of SPS
 Rules of origin, penalties for violation
 With provisions for for possible safeguard measures and other trade
remedies such as anti-dumping and countervailing measures
 Key features: principle of frontloading of liberalization commitments
and parity with other ASEAN trade partners
Nature and scope of EU
mandate on ASEAN-EU FTA
Services
 Progressive and reciprocal liberalization of trade in
services, with possible flexibilities for ASEAN
members
 FTA NOT to include
National marine cabotage law
Air services including domestic and international
transportation
 EC to have parity with other countries that have FTAs
with ASEAN
Nature and scope of EU
mandate on ASEAN-EU FTA
Trade and Competition
Address anti-competitive behaviour
Legal framework, transparency and
enforcement of competition rules
Customs and Trade Facilitation
Rules, requirements, formalities, procedures
for exports, imports and goods in transit
To cover customs enforcement of IPR
protection
Nature and scope of EU
mandate on ASEAN-EU FTA
Intellectual, Industrial and Commercial Property
Rules to protect and enforce IPR, especially
geographical indications
Capital Movement and Payments
Full liberalization of current payment and capital
movement (with exceptions for domestic
sensitivities and in cases of serious monetary
and forex difficulties, supervision of tax)
Nature and scope of EU
mandate on ASEAN-EU FTA
Public Procurement
Transparency in procurement procedures
Inclusion of challenge procedures
Progressive liberalization of procurement
markets at the national, regional and local
level, including in public utilities in priority
sectors
Nature and scope of EU
mandate on ASEAN-EU FTA
Trade and sustainable development
 Standards based on principles of sustainable development
(e.g. labor standards, environmental considerations)
 Provides for monitoring of social and environmental
impact of the agreement
Transparency in regulations
 Consultations with stakeholders “in advance of the
introduction of regulations with an impact on trade”
 Publication and public consultations on rules with impact
on international trade in goods and services
Nature and scope of EU
mandate on ASEAN-EU FTA
Institutional Framework
Creation of Trade Commission to
monitor FTA
Conclusion of FTA subject to the
conclusion of the Partnership
Cooperation Agreement of the EU with
ASEAN Members.
EU Country Strategy Paper for
the Philippines
2002-2006
1. Focus on health sector
2. Trade and Investment
3. Good governance
2007-2013
1. Delivery of basic services, meeting the MDG
2. Improved trade and investments flow
3. Good governance and reforms
4. Peace in Mindanao
Overview of RP-EU Relations:
Trade in Goods
The EU is one of the Philippines’ major trading
partners. It accounts for 14% of the market for
Philippine exports in 2004 (EU Webpage)
Philippine exports to EU represents only .7% of EU
market. Philippine imports represents only .5% of
EU to the world exports.
More than two thirds (76.43%) of Philippine exports
to EU are electronic products. Other exports
include clothing and textiles, coconut oil, woodcraft
and furniture, among others. (NSCB)
Overview of RP-EU Relations:
Trade in Goods
In 2006, Philippine merchandise exports to EU
countries were at US $ 8.55 billion, while
imports were at US $ 4.28 billion. Hence, the
Philippines has a positive trade balance of
US $ 4.26 billion with EU.
Among EU countries, the Philippines has a
negative trade balance with Denmark,
Finland, Ireland, Sweden, Spain, Austria and
France.
Overview of RP-EU Relations:
Trade in Goods
Ph ili ppin e Trade with EU countri e s,2006 (in m il li on US $)
C ou n rt i e s
Exports
Imports
Balan ce
Au stri a
Belgi um
Fran ce
German y
Luxemberg
Th e Ne therlan ds
De nmark
Fi nlan d
Irelan d
S we de n
Un i te dKi ngdom
Gre e ce
Italy
Portu gal
S pai n
Slove n i a
53.48
5 8.1 9
2 64.24
3 36.19
1 ,36 8.0 7
.9 7
4 09.46
5 5.9 3
1 24.70
8 84.56
1 23.00
3 66.02
5 .86
1 64.52
1 2.2 3
1 12.63
1 .91
-4 .7
4 69.76
-1 20.9
4 13.21
1 .50
4 ,35 9.7 2
-3 2.7 4
-7 8.3 4
-7 87.8 6
-9 5.9 4
1 18.07
8 .22
3 3.9 2
2 .87
-2 5.3 0
1 .20
7 34.00
2 15.27
1 ,78 1.2 8
2 .47
4 ,76 9.1 9
2 3.1 8
4 6.3 5
9 6.7 0
2 7.0 6
4 84.09
1 4.0 9
1 98.44
1 5.0 9
8 7.3 3
3 .11
Overview of RP-EU Relations:
Trade in Goods
EU Markets for Philippine Exports, 2006
4%
2%
3%
6%
9%
55%
21%
The Netherlands
Germany
Belgium
United Kingdom
France
Italy
Others
EU-RP Trade Relations: GSP
GSP - products of interest to the Philippines
pineapples, bananas, papayas, coffee, coconut, essential oils, articles of
apparel and clothing accessories, textile fibers, ceramic products, glass
and glassware, furniture, musical instruments, toys and games,
electrical machinery and parts, and motor vehicles. 8715 00 Baby
carriages and parts thereof NS 8716 Trailers and semi-trailers, other
vehicles not mechanically propelled;
Value of GSP exports to EU is 584 million Euro. The Philippines GSP
utilization rate is only 47%.
Overview of RP-EU Relations:
Trade in Goods
EU Markets for Philippine Exports, 2006
4%
2%
3%
6%
9%
55%
21%
The Netherlands
Germany
Belgium
United Kingdom
France
Italy
Others
Overview of RP-EU Relations:
Trade in Goods
• Meanwhile, the most important sources of imports
from the EU are Germany, Ireland, United
Kingdom, France and Belgium
• The Philippines imports electronic products,
industrial machinery and equipment, medicinal and
pharmaceutical products, transport equipment,
telecommunication equipment and electrical
machinery from the EU.
Overview of RP-EU Relations:
Trade in Goods
EU Sources of Philippine Imports,
6%
15%
8%
9%
31%
21%
10%
Belgium
France
Germany
The Netherlands
Ireland
United Kingdom
Others
Philippines Top Exports to EU
 Crude and Refined Coconut oil - Netherlands, Italy
 Skipjack and bonito - Germany, UK and North Ireland
 Tuna - Germany, Netherlands, Sweden, Finland, UK and North
Ireland
 Dessicated Coconut - UK and North Ireland, Belgium, Frace
 Pineapple (juice, prepared) - Netherlands, Belgium, UK and North
Ireland, Italy, Spain,
 Banana chips and crackers - Germany
 Seaweeds - Belgium, France, Spain,
 Abaca - UK and North Ireland
RP Top Agricultural Imports from
EU
Based on value from 1994-2006
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Food preparations
Sugar
Whey
Fungicide
Malt
Preparations for the manufacture of lemonades or other beverages
Unmanufactured tobacco
Prawn feeds
Pig fat
Overview of RP-EU Relations:
Investments
The EU has been increasing its investments in the
Philippines over the last decade (1990-2003)
• EU FDI accounts for 27% of total FDI in the Philippines
• EU portfolio investment accounts for 41% of total portfolio
investments in the country .
Latest average yearly EU investment in the country is at
EU 389 million (1998-2003)
EU members with big aggregate FDIs in the Philippines
from 1996-2007 (cumulative) are the Netherlands,
France, Italy, Germany and Sweden.
Overview of RP-EU Relations:
Investments
Overview of RP-EU Relations:
Investments
EU investments are in a broad range of
economic interests: such as information
technology and services, processed foods
and beverages, tourism, infrastructure and
utilities, chemical based consumer products,
agriculture products and allied services,
among others
Overview of RP-EU Relations:
Labor Markets
In 2006, Europe accounted for:
• 7.5% of total deployed OFW around the world
• .15% of total OFW remittances
The United Kingdom and Italy are two of the top ten
OFW destinations, absorbing 3.2% and 2.1% of
total rehires and newly hired OFW also in 2006.
Overview of RP-EU Relations:
Labor Markets
What are the motivations for
forming an FTA?
Motivationsfor forming an FTA
Philippine s
Europe
 Expanded export opportunities for
 Access to ASEAN markets
goods and labor
 Protection of investment interest
 Harmonization of Sanitary and
in RP and Asia
Phytosanitary measures and Nontrade barriers (SPS and NT Bs)
 Increased EU Investments in the
Philippines
What are the expectations for
forming an FTA?
Philippines
Greater market access?
• But EU tariff rates are already low for many of RP exports
• Possible market access through GSP, which the Philippines
now already enjoys
• Greatest block to market access are subsidy protection to EU
agricultural producers, which will most likely not be covered
by the FTA
What are the expectations for
forming an FTA?
Profile of Ph ili ppi n e Export Trade wi th EU
Number of tariff lines accounting for
95% of t otal tariff lines exported t o
EU (in HS 2 digit level)
Number of tariff lines accounting for
95% of t otal tariff lines exported t o
EU (in HS 6 digit level)
Simple MFN Average of traded tariff
lines
Weighted MFN Average of traded
tariff lines
P ercent of export tariff lines with
duty free imports
P ercentage of value of products
exported at zero tariffs
Source: Tariff Profile of the Philippines, WTO
43
214
6.3
1.7
56.8
89.6
What are the expectations for
forming an FTA?
Philippines
Harmonization of SPS and NTBs?
• SPS and NTBs, and not tariffs, are the
biggest block to RP exports to EU
• Harmonization requires substantial
investment in RP capability to adopt and
implement SPS and NTBs
What are the expectations for
forming an FTA?
Philippines
Increased EU investments in the Philippines?
Some of the “requirements” to create an investment
friendly Philippines ?:
• Liberalization of services industry
• Liberalization of restrictions on foreign ownership of lands
and corporations
• Laws to protect interest of foreign investors (concerns over
judicial decisions over Fraport case, Manila Hotel, etc)
What are the expectations for
forming an FTA?
Europe
• Part of objective of consolidating commercial presence in
Asia, especially in the services sector
• More stable and predictable policy and economic
environment for its investment interest, especially since
EU is increas ing its investments in the country
• A way to address important obstacles to trade and
investments in the Philippines such as regulations on
foreign ownership, restrictions in services sector, policies
supporting and protecting some sectors and industries
• Support to trade and investment flows is a key feature of
EU country strategy for the Philippines
FTA Areas
The ASEAN EU Vision group identified
the following areas of focus for the FTA:
• Trade and investment facilitation and
cooperation
• Standards and conformity assessment
• Development of efficient services sector
• Institutional cooperation
FTA Areas
Specific sectoral cooperation:
Agriculture, fisheries, forestry,
sustainable tourism, science and technology,
information and communication, intellectual
property rights, finance cooperation, mining
and energy, transport, manufacturing,
cooperation development, competition policy,
education
Summary of findings
Potential gains of increased market access to EU goods market is limited
due to the fact that tariffs on RP exports are already generally very low,
and is contingent on Philippine sector’ level of competitiveness;
Problem of domestic subsidy , which is one of the most important blocks to
RP exports, will not likely be comprehensively addressed by ASEANEU FTA
Most important focus of ASEAN EU is promoting and protecting its
investments in the region
For RP, this implies the need for (1) liberalization of services sector, (2)
removal of restrictions to investment, particularly on foreign ownership
and (3) creation a policy environment that safeguards interest of foreign
investors
Areas of work and intervention for CSOs in
ASEAN-EU FTA
Substance and Process
Substance
1.
2.
3.
4.
Monitoring and impact assessment of EU investments and interest in
the Philippines
Policy advocacy to safeguard national capability to regulate foreign
investments. This will involve involve advocacy to protect economic
provision in the Philippine Constitution, monitoring of related
proposed legislation and adminsitrative issuances etc.
Monitoring and impact assessment of EU-RP trade in goods
Monitoring and engagement on ASEAN-EU FTA provisions related to
trade facilitation, competition policy, government procurement,
intellectual property rights protection
Areas of work and intervention for CSOs in
ASEAN-EU FTA
Substance and Process
Process
1.
Advocacy for stakeholder awareness on the proposed
provisions/modalities of ASEAN-EU FTA.
ASEAN EU is programmed to start discussion on modalities this year
(at least four meetings are scheduled from now until December, two
of which will be held in Bangkok and Manila, in April and June,
respectively)
2. Advocacy for Philippine government to consult with
stakeholders on need and decisions to be part of ASEANEU before participating in modalities discussion and
negotiations
Thank you!