ftas: prospects for agribusiness - amcham philippines
TRANSCRIPT
FTAs: Prospects for Agribusiness
Atty. ALLAN B. GEPTY
Assistant Secretary
Department of Trade and Industry
COVID 19 Pandemic
• Globalization is being challenged
• More digital economy– E-Commerce
• Power
• Logistics
• Telecommunication
• Self reliant economy– Agriculture
• Agricultural technology
– Robust local industries
• International trade– Complementarity
– More than market access
Philippines’ Trade
Profile 2018
Source: WTO
• Global ranking
47th exporter
34th importer
• Share of trade to GDP: 31.4%
• Total world trade: US$ 182.2 billiono Exports: US$ 67.5 billion
o Imports: US$ 114.7 billion
• Trade Deficit: US$47.2 billion
PH Trade
2019
Source: PSA
• Total world trade: USD 182.5B
Exports: USD 70.9B
Imports: USD 111.6B
• Trade Balance: (-USD 40.6B)
• Export markets: US, Japan, China, HK,
Singapore, SKorea, Thailand, Germany,
Netherlands, Taiwan
• Import sources: China, Japan, SKorea,
US, Thailand, Indonesia, Singapore,
Taiwan, Malaysia, Vietnam
PH Export Markets
(2019)
FTA Partners
64.35%
Non-FTA Partners
35.65%
Composition of PH Exports
(2019)
Composition of PH
Imports
(2019)
Top PH Agricultural
Exports
(2019)
Bananas, including plantains, fresh or dried
(USD 1,954M)
Crude coconut oil (USD 640M)
Sardines, in airtight containers for retail sale
(USD 356M)
Fresh or dried pineapples (USD328M)
Other cigarettes containing tobacco (USD265M)
Desiccated coconut (USD 257M)
Carrageenan (USD 212M)
Fractions of unrefined coconut oil (USD 195M)
Pineapples, otherwise prepared or preserved
(USD 187M)
Other pineapple juice (USD 128M)
Enhanced PH-US Trade
Relations
• How can PH boost its agricultural sector under an enhanced PH US trade relations?
• How can an FTA improve US trade with the PH in the agriculture and related sectors?
PH-US Trade
(2019)
• 3rd largest trading partner: USD 19.6B
• Top export market: USD 11.57B
Major exports:o Semiconductor devices manufactured from materials on consignment basis (USD 1.09M)
o Digital monolithic integrated circuits (USD 851.14M)
o Ignition wiring sets and other wiring sets of a kind used in vehicles, aircraft or ships (USD
569.46M)
o Storage units (USD 559.48M)
o Static converters (USD 555.81M)
• 4th import source: USD 8.01BMajor imports:
o Other digital monolithic circuits (USD 989.38M)
o Oil-cake and other solid residues, whether or not ground or in the form of pellets, resulting
from the extraction of soybean (USD 890.21M)
o Other wheat and meslin (USD 645.16)
o Materials, accessories and supplies imported on consignment basis for the manufacture of
dice of any material (USD 470.15M)
o Other materials, accessories and supplies imported on consignment basis for the
manufacture of semiconductor devices (USD 414.48)
• Trade balance remains in favor of the
Philippines: USD 3.49B steadily
increasing since 2016
Enhanced PH-US Trade
Relations
• What are the areas of opportunities in the Philippines?
– Market
• Population
• Preference of US products
– Young labor force
– Research and development
US Investments
in the Philippines
(2018-2019)
• 6th largest investor in PH in 2018
• (Php 2.86B approved investments)
• 2019 (Jan-Sept): Php 6.18B approved
investments
• By sector:o administrative and support services activities (Php 10.53B)
o accommodation and food service activities (Php 2.08B)
o manufacturing (Php 390M)
o real estate activities (Php 165M); and, information and
communication (Php 150M).
• Sectors for consideration– Agricultural research and development
– Agricultural technology
Opportunities for PH
Agricultural
Products
• PH FTAs
o Top agri-exports covered mostly by
FTAs in force ASEAN FTAs – 0-5%
AANZFTA – 0% for PH top 20 agri exports
(A & NZ)
RCEP – negotiations ongoing for other agri-
products not covered by ASEAN+1 FTAs
PJEPA and PH-Korea FTA - improvements
in preferential access including agri products
PH-EFTA FTA – concessions granted to top
PH agri exports
• Preferential Schemes
o US GSP and EU GSP+ accord duty-
free entry or reduced duty
Top PH Agri-products
exports under US GSP
(2019)
ProductsValue
(US$M)MFN Rates GSP
Rates
Other fruit juice 37.806 0.5₵/liter 0
Other cane sugar 36.037 1.4606₵/kg 0
Other non-alcoholic beverages 22.504 0.2₵/liter 0
Coconuts 21.495 1% 0
Bananas, other than pulp 15.739 0.80% 0
Other sauces and preparations
therefore
9.585 6.40% 0
Other bread, pastry, cakes, biscuits
and similar baked products and
puddings
8.540 4.50% 0
Other food preparations not
elsewhere specified or identified
6.575 6.40% 0
Pineapples, frozen 6.111 0,25₵/kg 0
Bananas and plantains, frozen 4.775 3.40% 0
Other prepared or preserved fish 4.543 6% 0
Soy Sauce 4.039 3% 0
US Tariffs for Agricultural
Products
Tariffs for Top PH
Agri-Exports
Top PH Agri ExportsValue in
MilUS$
ATIGA
ASEAN+1 FTAs PH Bilateral FTAs
AANZFTA ACFTA AIFTA AJCEP AKFTA PJEPA PH-EFTA
Bananas, including plantains, fresh or dried
1,954 0-5 0 0 Excl 0 Excl Fresh: 8Dried: 0
0
Crude coconut oil 640 0 0 0 Excl 0 Excl 7 0
Sardines, in airtight containers for retail sale
356 0 0 0 Excl Excl 0 0
Fresh or dried pineapples 328 0-5 0 0 Excl 0 Excl 0 0
Other cigarettes containing tobacco 265 0-5 0 25 Excl 25 Excl 4 0
Desiccated coconut 257 0 0 0 Excl 0 Excl 0 0
Carrageenan 212 0 0 0 0 0 0 0 0
Fractions of unrefined coconut oil 195 0 0 0 Excl 0 Excl 0 0
Pineapples, otherwise prepared or preserved
187 0 0 0 0 0 0 Pooled quota: 30
0
Other pineapple juice 128 0 0 0 0 0 0 0 0
Challenges
Agriculture is a sensitive and highly
protected sector
Non-tariff measures (NTMs)o Compliance with SPS requirements
Cumbersome customs processes
Limitations on increasing productivity
and supplyo Environmental concerns e.g., drought
typhoons
Government
Interventions
SPS requirements – provide
assistance to PH exporters in
coordination with DA and PTICs
Customs procedures – moving
towards more facilitative regime in PH
FTAs
Aligning agri-interests with PH trade
agenda
Specific Government Initiatives to
Promote
Agri-Sector
DA’s 8 Paradigms to Level-up Agriculture
Recovery and Post Covid-19
Prospects
PH supports the call for international
cooperation seeking to:
keep markets open for trade and
investment
ensure food security, sustain regional
supply chains especially for food,
medicines and medical supplies
strengthen logistics network
Recovery and Post Covid-19
Prospects
• Gradual re-opening of global economy
• Stimulus packages needed to cushion
the effects of the pandemic
• International initiatives:o cooperation and information sharing on
global health issues including Covid-19 and
other diseases
o ensuring uninterrupted global supply chain
Am Cham and the PH-US
Trade Relations
Advocacy and
information
dissemination
Identification
of win-win
mechanisms
for private
sector/industries
Advocate/
lobby for
reforms
Identify champions in
the US and PH for
possible FTA support
• Explore more opportunities
• Take advantage of PH FTAs in the
region
• Increase GSP utilization
• Advocate for an FTA that is unique with
precise objectives
• Continue advocating for reforms
Thank you!