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PHILIPPINES-JAPAN FTA DIRECTOR SENEN M. PERLADA Bureau of Export Trade Promotion Department of Trade and Industry Doing Business in Free Trade Areas November.

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Presentation on theme: "PHILIPPINES-JAPAN FTA DIRECTOR SENEN M. PERLADA Bureau of Export Trade Promotion Department of Trade and Industry Doing Business in Free Trade Areas November."— Presentation transcript:

1 PHILIPPINES-JAPAN FTA DIRECTOR SENEN M. PERLADA Bureau of Export Trade Promotion Department of Trade and Industry Doing Business in Free Trade Areas November 7, 2012

2 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.

3 Maintain competitiveness Cross-border industrial complementation Sustain inflows of investments Mutual support on issues of common interest Reasons for Philippine Engagement in FTAs

4 Existing PH FTAs 1.ASEAN Free Trade Area ( AFTA) 2.ASEAN-China Free Trade Area (ACFTA) 3.ASEAN-Korea Free Trade Area (AKFTA) 4.ASEAN-Australia-New Zealand Free Trade Area (AANZFTA) 5.ASEAN-Japan Comprehensive Economic Partnership Agreement (AJCEPA) 6.Philippines-Japan Economic Partnership Agreement ( PJEPA) 7.ASEAN–India Free Trade Area (AIFTA)

5 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

6 YearTotal Trade Exports to Japan % Share to Total Exports Imports from Japan % Share to Total Imports Balance of Trade Philippines-Japan Merchandise Trade (Values in US$ Billion)

7 Japan as a Market for PH Exports(% share) *China includes Hongkong. Total PH exports -US$48.30B Total PH exports US$51.50B

8 Exports of Selected Product Groups PH-Japan, 2010 US$ 7, M PH-Japan, 2011 US$ 8, M

9 Japan as a Supplier of PH Imports(%share) *China includes Hongkong. Total PH imports US$60.49B Total PH imports US$54.93

10 Imports of Selected Product Groups PH-Japan, 2010 US$ 6, M PH-Japan, 2011 US$ 6, M

11 PJEPA and AJCEPA Complementary agreements providing options to businessmen PJEPAAJCEPA

12 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

13 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 )

14 Tariff Elimination on PH Exports to Japan Tariff Elimination Schedule for Phil. exports Tariff linesSample Products Immediate Elimination ( A- zero duty as of Dec.2008) 7, 476 (81.2%) Electronics Garments Furniture Metal manufactures Minerals Certain jewelry items Chemicals Coconut,papayas, mangoes Shrimps and Prawns Lobsters Gradual (B3 –B15) 888 (9%) Tuna(fresh, frozen) Processed vegetables Processed Fruits Small banana varieties Footwear Carpets and other textile floor Coverings Prepared/Preserved fish Leathergoods Phased reduction / TRQ/316 (4%) Fresh pineapples Fresh bananas Poultry Meat Cuts Cane sugar Cane molasses Ice cream Renegotiation269 (2.9%) Motor vehicles The PJEPA

15 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

16 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

17 SectorMFNAJCEPAPJEPA Lauryl alcohol Glycerol Other plastic packaging materials Epoxide resins Copper foil, backed with refined copper Copper foil, backed with copper alloys Scrap, powders of other base metals / Other non-wired glass4.200 Metals Chemicals & Plastics Glass Examples of PJEPA & AJCEPA Benefits for Philippine Business Enhanced market access in Japan for Philippine exports…

18 Examples of PJEPA & AJCEPA Benefits for Philippine Business SectorMFNAJCEPAPJEPA Frozen poultry meat cuts Yellowfin tunas Shrimps and prawns Smoked fish (TRQ) Fresh Mangoes Fresh pineapples In Quota =0 (1,600 MT in 2012) Refined coconut oil Crude coconut (copra) oil 4.5% or 5 yen/kg whichever is greater; 00 Other plywood and veneered panels Builders' woodwork Resource and agro-based products

19 Important PJEPA and AJCEPA References Text of the AJCEPA : Schedule of Commitments : (refer to the section on Annex 1 - Schedules for the Elimination or Reduction of Customs Duties)Annex 1 - Schedules for the Elimination or Reduction of Customs Duties Text and schedules of the PJEPA : (Im an Exporter Section)http://www.dti.gov.ph Japan Import Duties under PJEPA : Philippine Tariffs: http//www.tariffcommission.gov.ph/eo_852

20 Thank you…


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