As a broad-based agreement, the FTA covers trade in goods, trade in services, investment, competition, the protection of intellectual property rights, government procurement, and trade and sustainable development. In the area of trade in goods, EFTA abolishes all customs duties on industrial products as of the entry into force of the Agreement, whereas the Philippines will gradually lower or abolish its duties on the vast majority of such products.
The Agreement consists of 14 Chapters, 18 Annexes and 11 Appendices, covering the following main subjects:
- Trade in Goods
- Sanitary and Phytosanitary Measures
- Technical Barriers to Trade
- Trade in Services
- Protection of Intellectual Property
- Government Procurement
- Trade and Sustainable Development
- Institutional Provisions
- Dispute Settlement
Trade in Goods
With the entry into force of the Agreement, the EFTA States abolish all customs duties on imports of industrial products, including fish and other marine products, originating in the Philippines. The Philippines will gradually eliminate customs duties on industrial products, including fish and other marine products, originating in an EFTA State. Some product lines, notably in the area of fish and other marine products, are excluded from tariff elimination or reduction. The tariff concessions for industrial products including fish and other marine products are found in annexes II and III.
The Agreement also provides for tariff concessions on both basic and agricultural products, as covered by the bilateral Annexes VIII to X of the Agreement. Specific provisions facilitating trade in fish and other marine products are included in a separate annex to the goods chapter (Annex V). Provisions abolishing export duties are contained in the Agreement, however, the Philippines have kept the possibility for such duties for logs, as set out in Annex IV.
The rules of origin and methods of administrative cooperation between customs authorities are dealt with in Annex I. The Agreement provides for liberal rules of origin, based on the European model. The rules open up for accumulation with all types of products (industrial and agricultural) among the Parties as well as for the possibility of self-declaration of origin.
The Agreement contains detailed provisions on trade facilitation (Annex VI), including some “WTO +” provisions. The provisions inter alia open up for advance rulings and limit the possibility of new fees and charges.
Sanitary and Phytosanitary Measures (SPS)
Provisions pertaining to SPS are set out in chapter 4 to the Agreement. The chapter contains provisions pertaining to inspections, certification systems, system audits, certificates and import checks and ensures low threshold consultation mechanisms, as well as the possibility to review the chapter in the future.
Technical Barriers to Trade (TBT)
Provisions pertaining to TBT are set out in chapter 5 to the Agreement. The chapter contains provisions pertaining to procedures for movement of products, border control, market surveillance and conformity assessment procedures. The provisions further ensure stable and transparent conditions through encouraging the use of international standards, setting up a low threshold consultation mechanism, as well as ensuring the possibility to review the chapter in the future.
Trade in Services
The chapter on trade in services (chapter 6) closely follows the WTO General Agreement on Trade in Services (GATS) approach. It covers trade in all services sectors under all four modes of supply. Separate annexes on financial services (annex XIII), telecommunication services (annex XIV), movement of natural persons (annex XV), maritime transport services (annex XVI) and energy related services (annex XVII) complements the chapter with additional disciplines specific to those sectors. The Parties’ lists of specific commitments and exemptions from most-favoured-nation (MFN) treatment are contained in annexes XI and XII, respectively. Those lists shall be reviewed periodically with the aim to further liberalise trade in services between both sides.
The investment chapter (chapter 7) sets out the Parties’ obligation to admit investment from the other Parties in accordance with their laws and regulations. It also expresses the ambition of the Parties to provide stable, non-discriminatory and transparent investment conditions for investors of the other Parties and underlines the importance of investment promotion. Furthermore the Parties recognise that it is inappropriate to encourage investment by relaxing health, safety and environmental standards. Finally, the chapter foresees a review of issues related to investment within five years from entry into force of the Agreement, taking into account the treatment granted by a Party to non-parties in other free trade agreements.
Intellectual Property Rights (IPR)
The provisions on protection of intellectual property rights (chapter 8 and annex XVIII) cover, inter alia, trademarks, copyrights, patents and geographical indications, and include provisions for the enforcement of intellectual property rights and cooperation among the Parties. The provisions are based on the WTO Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) and provide for a high level of protection, taking into account the principles of most-favoured-nation treatment and of national treatment.
The Agreement also includes provisions on public procurement (chapter 9) aiming in particular at ensuring transparency, as well as including a renegotiation and review clause.
In chapter 10, the Parties recognise that anti-competitive business practices have the potential to undermine the benefits of liberalisation arising from the Agreement. They highlight the importance of cooperating on issues relating to competition law enforcement.
Trade and Sustainable Development
The Parties recognise that economic development, social development and environmental protection are interdependent. In chapter 11 they reaffirm their commitment to multilateral environmental and labour agreements and principles and undertake to uphold levels of protection while recognising the right of each Party to establish its own level of environmental and labour protection. Arbitration procedures do not apply to this chapter.
Institutional Provisions and Dispute Settlement
Chapter 12 establishes a Joint Committee to supervise and administer the Agreement and to oversee its further development. The Joint Committee, which normally meets every two years, may modify the Agreement or consider and propose amendments, as provided for in the Agreement. Chapter 13 sets out the rules and procedures applying with respect to the avoidance or settlement of any disputes that may arise between Parties concerning the interpretation or application of the Agreement. Chapter 14 sets out the provisions for amendments to the Agreement.