Exporters encouraged to join supply chains of big European industries

Filipino exporters and manufacturers should look at joining the supply chains in Europe as this advanced regional market holds vast potential for further trade growth, according to Philippine trade experts assigned in the region.

Magnolia Misolas-Ashley of the Philippine Trade and Investment Center (PTIC) office in Bern, Switzerland in an online presentation informed exporters of the need to take part in the supply chain, particularly in the European Free Trade Association (EFTA) trade bloc, where the Philippines is starting from a low export base.

For example, in Switzerland, one of the four EFTA member countries, Filipino companies can be among the suppliers of products like cocoa and coffee beans, fruits, and vegetables to the giant food processors located in the country.

Misolas-Ashley said opportunities are also abundant for suppliers to industrial manufacturers in Switzerland, including the chemical, machine building, electrical, metal, renewable energy, and precious metal industries.

The Philippines has a free trade agreement (FTA) with EFTA, a regional trade organization and free trade area in Europe comprised of Switzerland, Liechtenstein, Norway and Iceland. Signed in April 2016, the Philippines-EFTA FTA entered into force in 2018 for the Philippines, Liechtenstein, Norway, and Switzerland. Iceland ratified the agreement in 2019.

Clariza Mae Columna, commercial attaché at the PTIC office in Stockholm, in the same webinar organized by the Philippine Exporters Confederation, Inc., pointed out that opportunities also abound for consumer goods exports to the trade bloc.

She said EFTA, although just made up of four European states, of which three are smaller than the Philippines, boasts high GDP per capita, which gives their citizens strong purchasing power.

Columna reminds exporters that consumers there prefer quality over price and are increasingly opting for environmentally friendly modes of consumption. They are also drawn to new products, especially new technologies, and eco-labeled products, particularly for infant and children’s products, and organic products such as dairy.

Filipino enterprises should also become aware that Asian cuisine has been gaining popularity in recent years due to the growing number of Asian immigrants in the region.

“We have so much room for further growth,” said Columna, noting that the Philippines is actually lagging behind its ASEAN neighbors, including Vietnam and Thailand, in trading with EFTA nations.

Quality, innovative and eco-friendly consumer products have the biggest potential, including fruits; coconut and coconut oil; fishery products; clothing, footwear and accessories; furniture; and ceramics and handicrafts.

Meanwhile, commercial counselor Benedict Uy of PTIC-Brussels stressed the importance for Filipino exporters to the European Union (EU) to set up their own websites to showcase their company and products.

He noted the existence of a huge e-commerce market in Europe, spurred by the high access to the Internet and the impact of the ongoing pandemic.

Since majority of European buyers go online to source products, it is crucial to have a website that features products with “good stories to tell” to “push appreciation for your products,” said Uy. The website should also allow the visitor to check for details such as where the products or materials come from or how they are produced.

He also shared that the prevailing sentiment in the 27-member EU is embodied in the so-called “European Green Deal,” a set of policy initiatives by the European Commission with the overarching aim of making Europe climate neutral by 2050.

This has a big impact on the future direction of Philippine exports. Uy said opportunities await in the areas of organic and sustainably produced goods, artisanal products, and meat alternatives.

Also a significant and relevant development is the move toward smart mobility, which brings opportunities in the areas of bicycles, scooters and other eco-friendly transport products and accessories.

Uy also advises Filipino firms to explore non-traditional products that fall under the EU Generalised Scheme of Preferences Plus (GSP+) and not just rely on the old bestsellers. He pointed out that there are more than 6,000 product lines in the EU GSP+ program, and many of these are not benefiting from the program.

For instance, articles of apparel and clothing accessories are covered by GSP+ but exporters are unable to avail of the tariff benefits because they are not compliant with the rules of origin.

Finally, Uy reminded companies to register in the EU’s Registered Exporter System (EU REX), which is a requirement to be entitled to claim preferential tariffs under the EU GSP+ program.

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