Philippines-European Free Trade Association Free Trade Agreement (PH-EFTA FTA)

The Philippines-European Free Trade Association Free Trade Agreement (PH-EFTA FTA) represents a landmark deal between the Philippines and the EFTA States, which include Iceland, Liechtenstein, Norway, and Switzerland. This agreement stands as the second major bilateral trade pact for the Philippines. The parties signed the document in Bern, Switzerland, on April 28, 2016.

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This broad agreement governs various economic activities. It dictates rules for trade in industrial and agricultural goods, fish and marine products, and services. It also sets standards for investment, intellectual property rights, government purchasing, and sustainable development. For Philippine importers sourcing goods from EFTA countries, the agreement can significantly reduce import duties and taxes.

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Primary Objectives of PH-EFTA FTA

• Open trade in goods and services between the territories
• Grow investment opportunities for all involved
• Remove technical hurdles that block trade
• Promote fair competition within their respective markets
• Protect intellectual property rights according to global standards
• Encourage trade that supports environmental and social sustainability

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Timeline and Activation

The journey to this agreement began in November 2013 when the Philippines expressed interest in formal talks. Following five rounds of negotiations held between 2015 and 2016, the parties signed the final deal. President Rodrigo Duterte signed the papers on December 8, 2017. The Philippine Senate gave its approval on March 5, 2018. The agreement officially started on June 1, 2018. To put the rules into action, the Philippines issued Executive Order No. 61 on August 2, 2018.

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Product Coverage and Tax Cuts

The agreement covers almost all items classified under the national tariff code, though some exceptions exist.

Exporting to EFTA States

The EFTA States agreed to stop collecting customs duties on all industrial imports from the Philippines as soon as the deal started. This includes fish and marine products. The Philippines also secured better access for agricultural exports like desiccated coconut, preserved pineapples and tropical fruits, raw sugar, and tropical fruit wine.

Importing to the Philippines

The Philippines agreed to slowly lower or remove taxes on industrial goods coming from EFTA countries. Certain items the Philippines keeps protected by excluding them from tax cuts include certain live animals and meat, specific vegetables, tuna and tilapia, and certain petrochemical and fishery products.

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Rules for Importers and Exporters

To qualify for lower tax rates, a product must meet specific "Rules of Origin." This confirms the product truly comes from a member country. For a product to receive a tax discount, it must appear on the "Inclusion List" of the agreement, be "Wholly Obtained" (made entirely in the country) or meet a "Product Specific Rule" that requires a certain amount of local processing, and the exporter must provide a formal declaration of origin.

The Origin Declaration

Unlike other trade deals, an exporter does not need to get a special certificate from customs officers. Instead, the exporter writes an "origin declaration" directly. This statement confirms that the goods follow all the rules set out in the PH-EFTA FTA. For a broader comparison of how different certificates of origin work across Philippine trade agreements, see our Rules of Origin Guide.

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For guidance on preparing import documents and complying with customs requirements when using PH-EFTA FTA benefits, see our Import Documentation Checklist.