The Department of Trade and Industry (DTI) has been busy as of late. It was recently reported that the Philippines and Japan are currently in talks to amend the current Philippines-Japan Economic Partnership Agreement (PJEPA). The Philippine side is asking that Japan implement a zero tariff rate on exported bananas, and in return, Japanese imported cars will get a lower tariff rate.
Keen to continue capitalizing on global trade agreements, it has just been announced that the European Union (EU) and the Philippines have agreed on the first-ever Free Trade Agreement (FTA) between both entities. It was in a report by Business World Online that the agreement was confirmed by European Commission President Ursula von der Leyen after a phone call with Philippine President Ferdinand Marcos Jr.
A joint statement was issued by European Commissioner for Trade and Economic Security Maroš Šefčovič and Philippine Trade Secretary Ma. Cristina Roque. The joint statement explained that the deal puts a clear path towards its formal ratification in the coming months. Both parties have also told their respective negotiators to finalize the deal as soon as possible.
The new FTA aims to open new business and trade opportunities between the EU and the Philippines in terms of MSMEs, as well as farmers, manufacturers and consumers. In ASEAN, the Philippines is only the third nation to agree to an FTA with the EU, behind Singapore and Vietnam.
While there are no specific mentions of import tariffs, that will likely be a major point as the FTA gets finalized. The Philippine automotive industry has a steady presence of European brands like BMW, Audi, Porsche, Lamborghini, Bentley, Jaguar Land Rover, and Mercedes-Benz, just to name a few. The current crop sells cars at a premium rate, considering the existing import tariffs of 30 percent and the luxury segment the European brands normally compete in.
However, this new FTA could significantly lower tariffs enough to entice the entry of more mass-market brands. We recently lost Volkswagen locally, with nobody taking a liking to the Chinese-sourced VWs; under the new FTA, VW could possibly relaunch and sell European-made models in the Philippines. Apart from them, Renault, Fiat, and maybe even Peugeot could make significant gains locally at more competitive prices.
Words by Pablo Salapantan
Volkswagen made a HUGE mistake by selling only China-sourced cars. They're a German car brand, and in order to show the showcase the craftsmanship and precision of German engineering, they must bring in and sell made in Germany cars. Selling made in China cars make it feel like they're a Chinese company. Make it up, Volkswagen. There's still a chance.
ReplyDeleteDefinitely agreed. VW PH could have continued selling German-made models (some models were even sourced all the way from Mexico) even after bringing in Chinese-made models in 2018.
DeleteOr offering global models will also do
DeleteI believe it's not VW to blame but Ayala
DeleteSourcing the cars from China wasn't so much the problem but the fact that they didn't seem to care to update their offerings for so long that they became so unremarkable. I remember when they were doing huge discounts prior to announcing their exit and I saw that their stock were like 2021-2022 models.
DeleteI'm wasn't surprised that Ayala let go of VW when VW just seemed so uninterested in our market. The month before it was announced that Ayala was letting VW go and VW had no plans to partner with anyone else, I watched a video on youtube titled, "Volkswagen Turned Their Back on Us" from one of the former Donut hosts and it goes into a lot of how VW sort of lost its identity (both design and engineering-wise, and this is in the US, mind you) and was really not doing well the past years (like with the effects of diesel-gate, etc.).
I actually think VW could make a comeback to the Philippine market if they bring in their new EV designs which seem to have more of the classic VW in them (as many European reviewers have been saying). Being EVs means also avoiding the higher maintenance of German cars and their non-mechanic-friendly engines.
Bring back Peugeot, VW
ReplyDeleteBring Renault, Skoda, Citroen