Aussie trade deal to benefit local wiring harness sector

MANILA, Philippines - The Philippines’ free trade agreement with Australia has helped boost the market competitiveness of local wiring harness makers with the grant of zero tariff to the country’s auto and auto parts exports, International Wiring Systems (Phils.) Inc. (IWSPC) said.

“We were able to tap new market for our wiring harness, strengthen our competitive position against other countries that have bilateral FTAs with Australia, and generate jobs,” said Noemi Mandal-Madamba, logistics assistant manager of IWSPC, a manufacturer of automotive wiring harnesses for leading car brands such as Ford, Honda and Toyota.

For Ford alone, about 1,000 workers were being tapped by IWSPC. The company was also able to source locally available exclusive materials.

“We were able to catch up with our competitors like Thailand and we were able to provide jobs to close to 5,000 direct and indirect workers,” added Madamba.

The Philippine FTA with ASEAN-Australia-New Zealand (AANZFTA) took effect January this year and has since granted zero tariff for Philippine auto and auto parts.

Philippine exports to Australia amounted to $295 million in 2009, 46 of which consists of car parts, copper cathodes, nickel ores, UPS, lubricants and desiccated coconuts. In 2005, wiring harnesses are the country’s second top merchandise exports to Australia.

AANZFTA covers over 20 percent of Australia‘s merchandise trade, worth over $86 billion. But the agreement covers not just trade in goods but also services, investment, intellectual property, e-commerce, entry of business people and economic cooperation. AANZFTA grants zero tariff for all Philippine exports to Australia and New Zealand, with 96.4 percent of tariff lines covered by this year.