PHILIPPINES-JAPAN FTA DIRECTOR SENEN M. PERLADA Bureau of Export Trade Promotion Department of Trade and Industry Doing Business in Free Trade Doing Business in Free Trade Areas Areas November 7, 2012
Feb 01, 2016
PHILIPPINES-JAPAN FTA
DIRECTOR SENEN M. PERLADABureau of Export Trade PromotionDepartment of Trade and Industry
Doing Business in Free Trade Doing Business in Free Trade AreasAreas
November 7, 2012
What is an FTA?
Agreement between two or more countries to eliminate or reduce tariffs and other requirements of commerce that restrict trade between them.
Reasons for Philippine Engagement in FTAs
Existing PH FTAs
1.1. ASEAN Free Trade Area ( AFTA)ASEAN Free Trade Area ( AFTA)
2.2. ASEAN-China Free Trade Area (ACFTA)ASEAN-China Free Trade Area (ACFTA)
3.3. ASEAN-Korea Free Trade Area (AKFTA)ASEAN-Korea Free Trade Area (AKFTA)
4.4. ASEAN-Australia-New Zealand Free Trade Area (AANZFTA)ASEAN-Australia-New Zealand Free Trade Area (AANZFTA)
5.5. ASEAN-Japan Comprehensive Economic Partnership Agreement ASEAN-Japan Comprehensive Economic Partnership Agreement (AJCEPA) (AJCEPA)
6.6. Philippines-Japan Economic Partnership Agreement ( PJEPA)Philippines-Japan Economic Partnership Agreement ( PJEPA)
7.7. ASEAN–India Free Trade Area (AIFTA)ASEAN–India Free Trade Area (AIFTA)
FTAs increase competitiveness of PH exports because of zero or lower duties to be paid by importers of PH products.
Lowers cost of production of products with imported components from FTA partner economies.
Facilitates technology transfer and capacity building through FDI (Foreign Direct Investments).
Enhances market access for PH services ( e. g. tourism and travel related services, engineering and agricultural design, maritime services)
Simplifies requirements for entry of business visitors, intra corporate transferees, investors, natural persons supplying professional services ( including nurses and certified caregivers).
Major Benefits of Free Trade Agreements
Year Total Trade
Exports to Japan
% Share to Total Exports
Imports from Japan
% Share to Total Imports
Balance of Trade
2007 14.14 7.30 14.47 6.84 12.32 0.46
2008 14.31 7.71 15.70 6.60 11.64 1.11
2009 11.57 6.21 16.15 5.36 12.45 0.85
2010 14.58 7.84 15.23 6.74 12.28 1.10
2011 15.40 8.89 18.40 6.52 10.77 2.37
Philippines-Japan Merchandise Trade(Values in US$ Billion)
Japan as a Market for PH Exports(% share)
2010 2011
*China includes Hongkong.
Total PH exports -US$48.30B Total PH exports US$51.50B
Exports of Selected Product Groups
PH-Japan, 2010US$ 7,841.29 M
PH-Japan, 2011 US$ 8,886.14 M
Japan as a Supplier of PH Imports(%share)
2010 2011
*China includes Hongkong.
Total PH imports US$60.49BTotal PH imports US$54.93
Imports of Selected Product Groups
PH-Japan, 2010US$ 6,744.36 M
PH-Japan, 2011 US$ 6,516.38 M
PJEPA and AJCEPAComplementary agreements providing options to businessmen
PJEPAPJEPA AJCEPAAJCEPA
The Philippines Japan Economic Partnership Agreement (PJEPA)
PJEPA is the most comprehensive bilateral economic agreement of the Philippines with another country. It covers Trade in Goods, Services, Customs Procedures, Investments, Intellectual Property, Mutual Recognition , Movement of Natural Persons, Cooperation, Competition, improvement of the Business Environment.
PJEPA levels the playing field with other countries, including ASEAN markets that have bilateral EPAs with Japan already in place
The agreement entered into force on Dec.11,2008
ENHANCING MARKET ACCESS FOR PH EXPORTS
Tariffs on eighty one percent (81%)of export products were removed immediately. Tariffs on the remaining products will be reduced or removed over a period of three to fifteen years.
Tariff Rate Quotas on agricultural products such as fresh pineapples, cane molasses, poultry meat cuts.
The Philippines Japan Economic Partnership Agreement (PJEPA)
Tariff Elimination on PH Exports to Japan
Tariff Elimination Schedule for Phil.
exports
Tariff lines
Sample Products
Immediate Elimination ( A- zero duty as of Dec.2008)
7, 476(81.2%)
Electronics GarmentsFurnitureMetal manufacturesMinerals
Certain jewelry itemsChemicalsCoconut ,papayas, mangoesShrimps and PrawnsLobsters
Gradual (B3 –B15) 888(9%)
Tuna(fresh, frozen)Processed vegetablesProcessed FruitsSmall banana varieties
FootwearCarpets and other textile floorCoveringsPrepared/Preserved fishLeathergoods
Phased reduction / TRQ/ 316(4%)
Fresh pineapplesFresh bananasPoultry Meat Cuts
Cane sugarCane molassesIce cream
Renegotiation 269(2.9%)
Motor vehicles
The PJEPA
The ASEAN – Japan Economic partnership Agreement ( AJCEPA)
Essentially the same Philippine tariff commitments as in PJEPA.
Longer tariff elimination schedules for some products as compared to the PJEPA. Under the PJEPA tariffs on 127 lines will be eliminated immediately but under the AJCEPA it will take five years.
Implementation began in July 01 ,2010 under the
ambit of ASEAN.
ENHANCING MARKET ACCESS FOR PH EXPORTS
The AJCEPA
Integrates the Philippines into a regional market with a population of more than 700 million.
Manufacturing inputs from other ASEAN countries and Japan are considered “originating” and may be used to qualify for passing the ROO and getting AJCEP preference.
More choices in sourcing imported inputs
ENHANCING MARKET ACCESS FOR PHILIPPINE EXPORTS
Sector
MFNAJCEP
APJEP
A
Lauryl alcoholGlycerolOther plastic packaging materials Epoxide resins
4.75
3.93.1
0000
0000
Copper foil, backed with refined copper Copper foil, backed with copper alloysScrap, powders of other base metals
33
2.5 / 3
000
000
Other non-wired glass 4.2 0 0
Meta
lsC
hem
icals
&
Pla
sti
cs
Gla
ss
Examples of PJEPA & AJCEPA Benefits for Philippine Business
Enhanced market access in Japan for Philippine exports…
Examples of PJEPA & AJCEPA Benefits for Philippine Business
Sector
MFN AJCEPA PJEPA
Frozen poultry meat cutsYellowfin tunasShrimps and prawnsSmoked fish
33.51
10
03.50
7.3
0 (TRQ)0.600
Fresh MangoesFresh pineapples
317
017
0In Quota =0(1,600 MT in
2012)
Refined coconut oilCrude coconut (copra) oil
4.5% or 5 yen/kg
whichever is greater;
0 0
Other plywood and veneered panels Builders' woodwork
3
3.9
0
0
0
0Resou
rce a
nd
ag
ro-b
ased
pro
du
cts
Important PJEPA and AJCEPA References
Text of the AJCEPA :http://www.aseansec.org/agreements/AJCEP/Agreement.pdf
Schedule of Commitments:http://www.aseansec.org/22572.htm (refer to the section on Annex 1 - Schedules for the Elimination or Reduction of Customs Duties)
Text and schedules of the PJEPA : http://www.dti.gov.ph (I’m an Exporter Section)
Japan Import Duties under PJEPA: http://www.customs.go.jp/eng
Philippine Tariffs:http://www.tariffcommission.gov.ph/eo_767http:// www.tariffcommissiion.gov.ph/eo_905http//www.tariffcommission.gov.ph/eo_852
Thank you…