US meat exporters fear EU-Philippines FTA
US meat exporters have expressed concern over a planned free trade agreement between the Philippines and the European Union, fearing it could threaten their sales to the Southeast Asian country, which is their No. 1 buyer in that region.
Joe Schuele, director of communications of the US Meat Export Federation (USMEF), said officials from the Philippines, which he said is considered a very important but very competitive market for US red meat exports, recently expressed interest in pursuing an FTA with the EU.
Joel Haggard, USMEF senior vice president for the Asia-Pacific region, added that an FTA between the Philippines and the EU threatened US sales to the Philippines, their largest red-meat export market in Southeast Asia. Total beef and pork shipments in 2014 amounted to around US$150 million, with pork accounting for two-thirds of the amount.
"We believe the Philippines holds additional potential for US producers and exporters, as the country is a huge animal protein importer", he said.
USMEF said the Philippines maintains relatively high duties on imported meat, especially pork, whose duty rate is about 30% within import quotas and as high as 40% out-of-quota.
Haggard explained that because of these high duties, an FTA could provide European pork suppliers with a significant price advantage in the Philippines.
'Threat to our sales'
"More so than almost any other Asian market, price is an extremely important determinant of who captures market share there (Philippines)…. [S]mall duty differentials could radically alter supplier market shares. So, to the extent that a free trade agreement between the Philippines and the EU could lower duties for the larger EU suppliers, such as Germany, Spain, France and the Dutch, who have been very aggressive in other Asian destinations, as well, that could threaten our sales to the Philippines", Haggard said.
According to USMEF, European pork exports to the Philippines surged in 2014 to 163,287 metric tonnes, or almost double that of the previous year, after EU pork lost access to the Russian market.
In 2015, EU exports to the Philippines are down about 10% from 2014 but still 67% above their 2013 pace, it added.
On Dec. 22 EU Trade Commissioner Cecilia Malmström and Philippine Trade Secretary Gregory Domingo agreed to start negotiations for an EU-Philippines FTA.
"The Philippines has been one of the fastest-growing economies in the region in the recent years. We need to make sure our companies enjoy right conditions to seize the great potential of that market of 100 million consumers", Malmström said then.
The first round of negotiations is expected to take place in in the Philippines in the first half of 2016.--Rick Alberto
