Presentation on theme: "PHILIPPINES-JAPAN FTA"— Presentation transcript:
1 PHILIPPINES-JAPAN FTA Doing Business in Free Trade AreasPHILIPPINES-JAPAN FTANovember 7, 2012DIRECTOR SENEN M. PERLADABureau of Export Trade PromotionDepartment of Trade and Industry
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.2
3 Reasons for Philippine Engagement in FTAs Maintain competitivenessCross-border industrial complementationSustain inflows of investmentsMutual support on issues of common interest3
4 Existing PH FTAs ASEAN Free Trade Area ( AFTA) ASEAN-China Free Trade Area (ACFTA)ASEAN-Korea Free Trade Area (AKFTA)ASEAN-Australia-New Zealand Free Trade Area (AANZFTA)ASEAN-Japan Comprehensive Economic Partnership Agreement (AJCEPA)Philippines-Japan Economic Partnership Agreement ( PJEPA)ASEAN–India Free Trade Area (AIFTA)4
5 Major Benefits of Free Trade Agreements 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).5
6 Philippines-Japan Merchandise Trade (Values in US$ Billion) YearTotal TradeExports to Japan% Share to Total ExportsImports from Japan% Share to Total ImportsBalance of Trade200714.147.3014.476.8412.320.46200814.317.7115.706.6011.641.11200911.576.2116.155.3612.450.85201014.587.8415.236.7412.281.10201115.408.8918.406.5210.772.376
7 Japan as a Market for PH Exports(% share) 20102011Total PH exports US$51.50BTotal PH exports -US$48.30B*China includes Hongkong.
8 Exports of Selected Product Groups PH-Japan, 2011US$ 8, MPH-Japan, 2010US$ 7, M
9 Japan as a Supplier of PH Imports(%share) 20102011Total PH imports US$54.93Total PH imports US$60.49B*China includes Hongkong.
10 Imports of Selected Product Groups PH-Japan, 2011US$ 6, MPH-Japan, 2010US$ 6, M
11 PJEPA and AJCEPA Complementary agreements providing options to businessmen 11
12 The Philippines Japan Economic Partnership Agreement (PJEPA) ENHANCING MARKET ACCESS FOR PH EXPORTSThe 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 placeThe agreement entered into force on Dec.11,200812
13 The Philippines Japan Economic Partnership Agreement (PJEPA) 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.
14 Tariff Elimination on PH Exports to Japan The PJEPATariff Elimination on PH Exports to JapanTariff Elimination Schedule for Phil. exportsTariff linesSample ProductsImmediateElimination ( A- zero duty as of Dec.2008)7, 476(81.2%)ElectronicsGarmentsFurnitureMetal manufacturesMineralsCertain jewelry itemsChemicalsCoconut ,papayas, mangoesShrimps and PrawnsLobstersGradual (B3 –B15)888(9%)Tuna(fresh, frozen)Processed vegetablesProcessed FruitsSmall banana varietiesFootwearCarpets and other textile floorCoveringsPrepared/Preserved fishLeathergoodsPhased reduction / TRQ/316(4%)Fresh pineapplesFresh bananasPoultry Meat CutsCane sugarCane molassesIce creamRenegotiation269(2.9%)Motor vehicles14
15 The ASEAN – Japan Economic partnership Agreement ( AJCEPA) ENHANCING MARKET ACCESS FOR PH EXPORTSThe 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 theambit of ASEAN.
16 More choices in sourcing imported inputs ENHANCING MARKET ACCESS FOR PHILIPPINE EXPORTSThe AJCEPAIntegrates 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
17 Enhanced market access in Japan for Philippine exports… Examples of PJEPA & AJCEPA Benefits for Philippine BusinessSectorMFNAJCEPAPJEPALauryl alcoholGlycerolOther plastic packaging materialsEpoxide resins4.753.93.1Copper foil, backed with refined copperCopper foil, backed with copper alloysScrap, powders of other base metals32.5 / 3Other non-wired glass4.2Chemicals& PlasticsMetalsGlass
18 Examples of PJEPA & AJCEPA Benefits for Philippine Business SectorMFNAJCEPAPJEPAFrozen poultry meat cutsYellowfin tunasShrimps and prawnsSmoked fish33.51107.30 (TRQ)0.6Fresh MangoesFresh pineapples17In Quota =0(1,600 MT in 2012)Refined coconut oilCrude coconut (copra) oil4.5% or 5 yen/kg whichever is greater;Other plywood and veneered panelsBuilders' woodwork3.9Resource 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)Text and schedules of the PJEPA : (I’m an Exporter Section)Japan Import Duties under PJEPA:Philippine Tariffs:http//