Free Trade Agreement between EFTA and the Philippines to enter into force on June 1, 2018

FTA, the Free Trade Agreement between the European Free Trade Association (EFTA) and the Philippines will enter into force for Switzerland and the Philippines on June 1, 2018

Parliament adopted the agreement aimed at deepening economic and trade relations between the contracting parties last March. The Federal Council approved the necessary amendments to the ordinance implementing the tariff concessions set out in the agreement on May 9.

The free trade agreement signed between the Philippines and the EFTA states (Iceland, Liechtenstein, Norway and Switzerland) on April 28, 2016 covers numerous sectors and in particular liberalises trade in goods and services. Swiss exports will enjoy improved access to the Philippine market and Swiss businesses will have a competitive advantage in this market compared to countries without such an agreement. Furthermore, the agreement also removes or prevents discrimination against existing and future free trade partners of the Philippines.

Elimination of customs duties

As of June 1,  2018 Swiss exporters will benefit from duty-free access to the Philippine market for almost all industrial products (almost 92 %); these account for 96 % of current Swiss exports to the Philippines. With only a few exceptions, duties on the remaining industrial products will be eliminated gradually over the next three to ten years. Furthermore, the duties currently imposed by the Philippines on the majority of the most important agricultural products (processed and unprocessed) exported by Switzerland will be eliminated either immediately (e.g. energy drinks, sugar confectionary, chocolate, cheese, powdered milk) or following a transition period of up to six years (in particular biscuits, muesli, jams, dried beef and tobacco products). Thanks to the agreement, customs duties on coffee capsules will be halved.

In turn, Switzerland will eliminate all duties on industrial products from the Philippines. It will also grant preferential market access for certain agricultural products of particular interest to the Philippines in terms of exports, particularly muscovado sugar (an unrefined sugar speciality), certain cut flowers and various mainly exotic fruits and fruit juices.

Potential for growth

The agreement provides Swiss businesses with an opportunity to deepen economic and trade relations with a partner with major potential for development. With a population of over 100 million and strong economic growth, the Philippines is an interesting growth market for Swiss businesses. In 2017 the Philippines was Switzerland sixth largest trade partner in Southeast Asia.