Exporters urged to use lower tariffs under free trade deal

MANILA, Philippines - Filipino exporters are encouraged to take advantage of reduced tariffs under the ASEAN-Australia-New Zealand Free Trade Agreement (AANZFTA) to increase their exports of goods and services to Australia, the world’s 13th largest economy.

Ross Bray, senior trade and investment commissioner for the Philippines, said tariff rates for all exports to Australia as well as New Zealand fell to zero since AANZFTA came into effect in 2010.

Bray identified sector opportunities as industrial products, motor vehicles and parts, garments and fabrics, furnishings, furniture and wood products, tyres and rubber items and paints.

   He said processed agricultural products including vegetables and fruit, fruit juices, fresh pineapples and fresh tuna/fish are also hits in the Australian market.

Bray pointed out that imports from a number of ASEAN members including the Philippines are claiming AANZFTA tariff preferences, with Malaysia as the largest source of imports.

 “A much more significant percentage of total Philippine imports (26.1 percent) claimed AANZFTA tariff preference than any of the other ASEAN countries,” he bared.

He also noted the significant drop in imports from Malaysia, the Philippines and Vietnam which were still paying most favored nation (MFN) tariffs in 2010. MFN tariff refers to duties on imported items coming from countries where another nation has no bilateral or regional FTAs.

“The significant percentage of imports from the Philippines (were) still paying MFN tariffs, and, to lesser extent, from Malaysia and Vietnam. This raises the question as to why these imports are not yet claiming AANZFTA preference.”  

Likewise, Philippine importers can take advantage of reduction of tariffs particularly on some agriculture products.  

He cited as examples wheat and flour grains with tariffs already falling from seven percent to zero this year. That of beef, meat and livestock would be also reduced to zero by 2012; while tariffs on horticulture including juice by 2013.

Bray said around 95 percent of tariff lines would be brought down to zero by 2020.

The AANZFTA covers not just trade in goods and services but also investment, intellectual property, e-commerce, entry of business people and economic cooperation.