Customs official bares benefits of trade pacts

CEBU, Philippines - The use of free trade agreements (FTAs) will increase the competitiveness of Philippine exports because of zero or lower tariffs to be paid by importers of the country's goods, a customs official said.

Louis Adviento, customs operations chief at the Export Division of the Bureau of Customs (BoC) Port of Manila, said the FTA also lowers the cost of production of products with imported components from FTA partner economies.

FTAs are designed to improve access for exporters and investors into the overseas market, Adviento told Cebu exporters on Tuesday in an information session on export competitiveness by the Department of Trade and Industry (DTI) here.

"[FTA] facilitates technology transfer and capacity building through foreign direct investments," he said in his presentation.

Trade pacts not only benefit goods but also enhance market access for Philippine services such as tourism and travel-related services, engineering and agricultural design and maritime services, he said.

According to Adviento, the Philippines has engaged in trade agreements with other economies to maintain competitiveness; sustain the inflow of investments; establish cross-border industrial complementation; and gain mutual support on issues of common interest.

The customs official cited the seven existing Philippine FTAs which include ASEAN Free Trade Area (AFTA); ASEAN-China Free Trade Area (ACFTA); ASEAN-Korea Free Trade Area (AKFTA); ASEAN-Australia-New Zealand Free Trade Area (AANZFTA); ASEAN-Japan Comprehensive Economic Partnership Agreement (AJCEPA); Philippines-Japan Economic Partnership Agreement (PJEPA); and ASEAN-India Free Trade Area (AIFTA).

The main objective of these FTAs, he said, is to promote the free flow of goods within the trade area thorough the gradual cut or elimination of customs duties on most traded goods.

Trade agreements are believed to boost economic integration among participating nations.

The DTI is giving Doing Business in Free Trade Areas (DBFTAs) to increase FTA utilization rate among local exporters especially the small players. (FREEMAN)