Negotiations for an EU-Philippines Free Trade Agreement were launched in December 2015. The Philippines is a high growth market for spirits, currently dominated by local products (over 90%). Brandy is the largest spirit category, both in value and volume. The first round of negotiations will start at the end of May, and we have already shared our agenda with the Commission, comprising the full elimination of 15% import tariffs. One could consider 15% a small number in comparison to the 150% of India but in the context of the ASEAN-Australia-New Zealand FTA all tariffs on their spirits have been eliminated since 2015. To secure a competitive position in the market, it is essential that EU exporters receive similar benefits as soon as the EU-Philippines FTA enters into force.
We also ask for the adoption of rules of origin that would secure the use of regional transshipment hubs; for the recognition and protection of geographical indications and for a legal prohibition on the removal of EU producers’ traceability information in the fight against illicit alcohol. Last but not least, the agreement should make sure that in the future tariff elimination could not be jeopardized by subsequent excise tax increases.
Improving market access for spirits products in the region is very important to us due to the fear that a successful implementation of the TPP will boost the integration of the region, further away from Europe. The Commission needs strong support to move ahead in the region and we welcome the recent conclusion of the scoping paper with Indonesia which will allow the Commission to now work on a formal mandate for negotiations. Indonesia remains a very difficult market, very protectionist and where issues like tariffs, GIs and public procurement are highly sensitive. However, it remains one of the biggest and therefore one of the most important economies of the region.
Vietnam is another important country. The FTA agreement which foresees the elimination of the 45% import tariff over a seven year period was signed in December 2015 and the entry into force is expected early 2018 provided it is ratified by the European Parliament. In the meantime, we are confronted with an excise tax increase on imported goods which - if not changed - could put at risk the benefits expected from the FTA. Once again, enforcement of the rules will be key.
