Overview of PH-EFTA Case Model
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01Scope and Coverage EFTA's Limited Membership
Small Group of Economies: EFTA consists of four countries (Iceland, Liechtenstein, Norway, and Switzerland) with a collective focus on trade in goods and services, unlike larger agreements involving multiple nations with diverse economic profiles, such as the ASEAN Free Trade Area (AFTA).
Exclusion of Agriculture: EFTA generally excludes comprehensive agricultural trade liberalization compared to FTAs like the EU-Philippines FTA, which often covers agriculture in detail.
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02Focus on Trade and Economic Cooperation
Comprehensive Goods and Services: Unlike some FTAs that may focus primarily on goods (e.g., the Philippines-Japan Economic Partnership Agreement or PJEPA), PH-EFTA includes extensive provisions for both goods and services, making it broader in scope.
Investment and IPR: Emphasizes investment and intellectual property rights, more so than agreements with ASEAN countries which may have varied focus.
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03Tariff and Non-Tariff Measures
Immediate Liberalization: Provides for immediate or phased tariff reductions on a significance number of goods, which may differ from other FTAs where tariff eliminations are more gradual or selective.
Specific Product Lists: EFTA agreements often include specific schedules for different products, whereas other FTAs might use broader categories.
Advanced Customs Cooperation:
Focuses on advanced customs procedures and technical barriers to trade, possibly more detailed than FTAs with developing nations that may not have as complex regulatory environments. -
04Investment and Intellectual Property
Stronger IPR Protections: EFTA countries often require high standards of intellectual property rights protection, potentially more rigorous than agreements with regional partners where standards might be aligned to local capacities.
Investment Protection: Emphasizes investment protection measures that may be more detailed compared to regional FTAs.
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05Dispute Settlement Mechanisms
Structured Mechanisms: Incorporates structured and formalized dispute settlement mechanisms, which can be more developed than those in regional or bilateral agreements, aiming to align with international norms.
Utilization of low-tariff imported raw materials.
Tariff Elimination Rates for Agricultural Raw Materials under PH-EFTA FTA
EFTA countries (Iceland, Liechtenstein, Norway, and Switzerland) generally have high standards and protective measures for their agricultural sectors. However, they have agreed to eliminate tariffs on many agricultural raw materials to facilitate trade with the Philippines.
Some tariffs are eliminated immediately, while others are phased out over several years, depending on the sensitivity of the products.
Tariff Reduction Sensitive
Agricultural Products
Product specific examples
Bananas, pineapples, mangoes often receive immediate tariff-free access.
Generally benefit from immediate tariff elimination.
Typically subject to immediate tariff elimination under EFTA agreements.
Certain meats like pork and poultry might have tariffs reduced gradually.
Processed forms of agricultural products may see phased tariff reductions rather than immediate elimination.
Cheese, butter, and other dairy products might have reduced tariffs but not complete elimination.
Some vegetables that compete directly with local production may have reduced rather than eliminated tariffs.
Detailed provisions for Tariff Elimination (Philippines -> EFTA ; when exporting) To provide a precise understanding, here's a detailed representation for agricultural raw materials:
Immediate Elimination Fruits, cocoa, coffee
Phased Elimination Meats (5-10 years)
Sensitive Products Dairy products, some vegetables
Immediate Elimination Similar to Switzerland
Phased Elimination Similar to Switzerland
Sensitive Products Similar to Switzerland
Immediate Elimination Fruits, certain grains
Phased Elimination Meats, processed foods (5 years)
Sensitive Products Fish, seafood, some dairy
Immediate Elimination Tropical fruits, coffee
Phased Elimination Meats, processed foods (3-5 years)
Sensitive Products Local vegetables, dairy
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Cocoa and Coffee
Tariff Reduction Rate Immediate elimination(0%)
Example Products Cocoa beans, raw coffee
Example Products Immediate
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Tropical Fruits
Tariff Reduction Rate Immediate elimination(0%)
Example Products Mangoes, bananas, pineapples
Example Products Immediate
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Processed Fruits/Veg
Tariff Reduction Rate Phased reduction
Example Products Canned fruits, frozen vegetables
Example Products 3-5 years
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Meat Products
Tariff Reduction Rate Gradual reduction
Example Products Pork cuts, poultry, sausages
Example Products 5 years
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Dairy Products
Tariff Reduction Rate Gradual reduction
Example Products Milk powders, cheese
Example Products 5-7 years
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Specialty Dairy
Tariff Reduction Rate Reduced tariffs, no elimination
Example Products Specialty cheeses
Example Products 7 years
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Animal Feeds
Tariff Reduction Rate Phased reduction
Example Products Specific feed categories
Example Products 3 years
[Cost reduction Model for Philippines Specialty Products]
PH-EFTA is an FTA specialized in agricultural products, offering an opportunity to reduce costs when exporting processed food products from the Philippines.
Change of raw material import routes utilizing PH-EFTA For example, when importing yogurt from EFTA MFN rate for 0403.20 is 7% but PH-EFTA rate is 0%