THE TUNA sector is seen to get the most benefits from a potential free trade agreement between the European Union and the Philippines, studies commissioned by the government showed.
Firms exporting tuna to the European Union however may be limited as the economic bloc has higher than average quality standards.
“Tuna is a potentially bright spot if there will be a free trade agreement with the European Union as we have become net importers of fish in terms of volume and a net exporter in terms of value in the last three decades,” Danilo C. Israel, senior research fellow of the Philippine Institute for Development Studies (PIDS) said yesterday during the consultations for the free trade agreement held in Pasay.
Trading between the Philippines and the European Union on fisheries, however, could be hampered by the high standards of the bloc which could mean smaller firms will be unable to compete.
“The sanitary and phyto-sanitary standards of Europe are much higher than the rest of the world and other countries in Asia already cannot meet these standards. This means it might only be the bigger firms that are able to take advantage,” Mr. Israel said.
He said one of the potential considerations that the government may take during negotiations is to seek lower standards and either lower tariffs or higher quotas for tuna.
The study is part of the scoping exercises being done by the government to gauge the impact of a free trade agreement between the Philippines and the European Union.
Another potential area that will benefit from a free trade agreement is the agricultural sector as the country can take advantage of this new market for some commodities however the impact is only by a small percentage.
The strong Business Process Outsourcing sector of the Philippines may also benefit from a free trade agreement because it gives the country a competitive advantage.
The labor market, however, may be impacted somewhat negatively by a free trade agreement.
“There are very high labor standards in the European Union and it also very limited market access for Filipino workers via the movement of natural persons to the European Union. Our sensitive sectors may become vulnerable for liberalization,” Tereso S. Tullao, Jr., director of the Angelo King Institute for Economic and Business Studies of De La Salle University said.
“A lot of preparation and assistance is needed if we pursue a free trade agreement; we will be very diligent in this process,” Trade Undersecretary Adrian S. Cristobal said.
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Source: Emilia Narni J. David, BusinessWorld. (20 September 2012)
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