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PIA Press Release

DTI bullish on more exports under free trade agreements

by Carina L. Cayon

Davao City (26 November) -- The Department of Trade and Industry expects that the country would be delivering more exports after an intensive education campaign with the business sector explaining anew the benefits of the free trade agreements with other countries.

In a bid to improve the country's utilization of the existing FTAs that the country has entered into with other countries and for the business sector to harness the potential gains of a zero or much lower tariffs, DTI's International Trade Group has been making rounds across the country to undertake massive information campaign.

DTI Undersecretary Merly Cruz said that the department has been bullish about the campaign as major part of the government's enhanced international trade strategy to improve the country's utilization rate of the existing FTAs with Japan, Korea, Australia, New Zealand and China.

"In our assessment, the lack of timely information and relevant orientation on the merits of free trade agreements stands to be the major setback that has stalled the program of our business sector," Cruz stated during her keynote speech at DTI's information campaign in Davao City.

Cruz told on Monday various exporters and stakeholders of Davao Region about an Asian Development Bank study in June this year, revealing that the Philippines was among the ASEAN countries with lowest utilization rates scoring at 20 percent of the existing FTAs that the country has been implementing.

She disclosed that a partial figure from the Bureau of Customs showed a utilization rate of no higher than 30%, adding that it's as low as 1% at times.

According to the survey, Cruz said China had the highest utilization rate of 45% while Singapore had 17%.

"This means that we have not been making the most of the opportunities in the global markets that happen to be available for our local products through much lower or zero tariffs," Cruz said.

She continued, "We have not been taking advantage of the emergence of more open markets, thus fail to reap the benefits that these FTAs would have offered."

The USEC stressed on the vast trading opportunities for the country's producers and exporters as one big advantage of the FTA, citing that in year 2008, Philippine products entering the market of the FTA partners started to enjoy "on the average, only 5.2% tariffs."

She added that this is a "clear advantage over products from other countries entering the same market, but who do not have FTAs with the same market."

Cruz explained that since goods are allowed entry to foreign markets of FTA partners with low tariffs or duty free/zero tariff, exporters would have an advantage over competitors with no equivalent FTAs and which would be subject to higher tariffs.

She stated further that lower or zero tariffs would provide "decreased costs and enhanced competitiveness for our producers and exporters that import raw or finished materials or parts for their products."

Cruz has disclosed though that the entry of the ASEAN, Australia, New Zealand FTA (AANZFTA) in January this year, has provided an export growth by 54% in the first semester, adding that it led a "37% growth for total exports of the time."

According to her, China, Japan and Korea were "collectively the largest destination of Philippine exports at 42% of the total" for the first five months this year.

As future endeavor, the country would be negotiating FTAs with the European Union and members of the Trans-Pacific Partnership Agreement that includes the U.S., Cruz informed. (PIA-XI) [top]

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