More efforts to boost FTA utilization by SMEs pushed

MANILA, Philippines - The government should continue its efforts to further enhance the utilization of free trade agreements (FTAs) especially by manufacturing and services sector companies, including setting up an FTA portal.

A new discussion paper published by the Philippine Institute for Development Studies (PIDS) titled “How Are Firms Responding to Philippine Free Trade Agreements?” made the proposal although the utilization rate of FTAs reported by the manufacturing sector is increasing compared with a 2010 study.

The two sectors report that FTA utilization is still hampered by a lack of information which, when available, was rated poorly in terms of quality and volume.

“Identified as the main source of information for FTAs, the government needs to increase the efficiency scope, and reach of its promotional and technical training programs and to rely further on technology to deliver results,” it said.

The Department of Trade and Industry (DTI) has made considerable efforts to increase FTA awareness through the conduct of Doing Business in FTAs (DBFTA) sessions nationwide, and the publication of a DBFTA Handbook, as well as FTA primers.

To complement these initiatives, the PIDS paper said the government needs to further promote FTAs by setting up a portal where information about the benefits of FTAs, the process of gaining access, the requirements and forms and other relevant information can be easily accessed or downloaded.

“This FTA portal, which should be an improvement on what is currently offered on the DTI website, will most likely enhance FTA awareness, eventually translating into increased utilization levels,” it said.

The paper noted that the FTA portal is not only cost-effective but also a means to promote transparency in the process of Certificates of Origin (COO) issuance, thus minimizing rent-seeking behaviour of the agencies involved in FTA implementation.

It said efforts should include reforms toward electronics COO and self-certification and linkage to the national single window.

“This will improve timelines and ease the entry of micro, small and medium enterprises. Regional efforts to harmonize ROOs (rules of origins) can increase FTA utilization across ASEAN member-countries and pave the way for the forthcoming Regional Comprehensive Economic Partnership,” the paper added.