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German firms call for resumption of EU-PH free trade talks

MANILA: German companies have called for the resumption of negotiations for European Union-Philippines Free Trade Agreement (EU-PH FTA), saying an FTA will impact their investments in the country.

In a survey done by the German-Philippines Chamber of Commerce and Industry (GPCCI) and Singapore-German Chamber of Industry and Commerce (SGC) from May 11 to May 24, 83 percent of German firms in the Philippines said they consider the resumption of the EU-PH FTA talks as “very important” to their businesses.

“The results show the huge potential for the Philippine-German and more general for the Philippine-European economic relations,” GPCCI president Tristan Arwen Loveres said in a statement Monday.

Loveres added they are looking forward to seeing the next round of FTA negotiations this year. 

The surveyed firms said the EU-PH FTA can address their challenges on trade, investments, and competitiveness in the Philippine market. 

According to the survey, cumbersome customs procedures, tariffs, and import and export license requirements are among the trade barriers that German firms are facing in the Philippines.

Eighty-two percent of the surveyed firms believe that the elimination of tariff and non-tariff barriers is important to their business success in the country, while 65 percent of the companies said their export performance will improve if these trade barriers will be addressed in the EU-PH FTA.

About 32 percent of the German firms said they are holding back their investments in the Philippines due to current investment barriers. 

They cited the top three investment barriers in the country, which include capital ownership and equity caps, restrictions on specific types of legal entity, and license requirements.

Bilateral trade between the Philippines and Germany in 2019 reached EUR6.3 billion, while Germany’s investment net inflows here posted at EUR218 million in 2018. 

“All countries and regions look for measures to stimulate the economy after the Covid-19 (coronavirus disease 2019) pandemic in the coming years.

A Philippine-EU Free Trade Agreement linking these two important economic players together would have a strong impulse,” GPCCI executive director Martin Henkelmann said. 

Moreover, German companies believe that an EU-PH FTA in place will boost the competitiveness of the Philippine market. 

Without the FTA in the current situation, 69 percent of the surveyed firms said they are at a disadvantage compared to other foreign investors whose countries have free trade agreements with the Philippines. 

The survey showed that German companies are facing competition mostly from Asian countries, most notably from China, Japan and South Korea. 

The Philippines has bilateral FTA with Japan while enjoying free trade arrangement with China and South Korea through Asean. 

Ninety-one percent of the surveyed German firms expect the EU-PH FTA will increase their competitiveness in the market. 

The Philippines and EU launched the FTA talks in December 2015 and have done two rounds of negotiations in May 2016 and February 2017. 

(PNA/ Kris Crismundo/ SRNY/ RSP)

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