Philippine Trade Secretary Adrian S. Cristobal Jr. signed the free trade agreement with the European Free Trade Association, on behalf his country, in Bern on April 28, 2016. It came into force on June 1, 2018. The free trade agreement offers huge benefits for the Swiss chemical, pharmaceutical, watch and MEM industries, but also for the chocolate and confectionery, food preparation and tobacco sectors.
Embracing free trade, step by step
99.5 percent of Switzerland's total exports (excluding agriculture and undefined items) are duty-free thanks to the free trade agreement, 0.5 percent of which enjoy a continuous reduction in tariffs. The tariffs levied on agricultural produce exported by Switzerland - processed and unprocessed - were also axed either immediately or will be scrapped after a transitional period of up to six years. Tariffs on coffee capsules will be halved. The free trade agreement thus offers Swiss exporters huge savings potential. The prerequisites for this are correct paperwork and successfully completed customs clearance.
Untapped savings potential
How much of the FTA savings potential is actually used by Swiss exporters? And where are utilization problems evident? Prof. Dr. Patrick Ziltener of the University of Zurich investigated these research questions. His research revealed that the free trade agreement with the Philippines yields an annual maximum savings potential of USD 12.3 million.
Most tariffs on Swiss export goods were eliminated from day 1. Rebates are also used. However, although several products received duty-free status in the first two years, this is often not applied to the full extent. So far, the agreement has not been applied to textiles, metal products and machinery such as pumps or compressors, nor to dairy products, chocolate, sugar and tobacco products. According to Prof. Dr. Patrick Ziltener, however, the application will increase over time.
You can read the detailed research results here:
