Audio
Officials from the Philippines recently expressed interest in pursuing a free trade agreement with the European Union, hoping to launch formal FTA negotiations early next year.
Joel Haggard, U.S. Meat Export Federation (USMEF) senior vice president for the Asia Pacific region, explains how the Philippines has developed into the largest destination in Southeast Asia for U.S. pork and beef exports. But the market is extremely competitive and price-sensitive, and the Philippines maintains relatively high duties on imported meat – especially pork, on which the duty rate is about 30 percent within import quotas, and as high as 40 percent out-of-quota. Because of these high duties, a free trade agreement could provide European pork suppliers with a significant price advantage in the Philippines.
European pork exports to the Philippines surged in 2014 after EU pork lost access to the Russian market, with volume nearly doubling from the previous year to 163,287 metric tons (mt). In 2015, EU exports to the Philippines are down about 10 percent from a year ago but still 67 percent above their 2013 pace.
TRANSCRIPT:
Joe Schuele: Officials from the Philippines, which is a very important but also very competitive market for U.S. red meat exports, recently expressed interest in pursuing a free trade agreement with the European Union. U.S. Meat Export Federation Senior Vice President for the Asia Pacific Joel Haggard has more details in this USMEF Report.
Joel Haggard: The Philippines, an important Southeast Asia market for U.S. beef and pork, has announced that it is undertaking initial discussions with the European Union to decide what areas of trade could be covered under free trade discussions that could be launched early next year. The Philippines are our largest red meat export market in Southeast Asia, with total beef and pork shipments last year amounting to roughly U.S. $150 million. Pork accounts for roughly two-thirds of that amount, but we believe the Philippines holds additional potential for U.S. producers and exporters, as the country is a huge animal protein importer.
Joe Schuele: Haggard has further details on why an FTA between the Philippines and the European Union would be a concern for U.S. exporters, especially on the pork side.
Joel Haggard: More so than almost any other Asian market, price is an extremely important determinant of who captures market share there. Much of the protein that the Philippines imports are further processed into affordable processed meats, such as pressed ham and hot dogs. Unfortunately, he Philippines still maintains high duties, especially on pork at 30 percent for in quota shipments. And small 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 .
Joe Schuele: For more on this and other trade issues, please visit USMEF.
Source: USMEF