PHILIPPINES-SWITZERLAND ECONOMIC RELATIONS

Philippine-Swiss bilateral economic relations actually predate formal diplomatic relations. Interaction between the two countries can be traced back to the early 1800s when Swiss traders, missionaries and travellers ventured into Southeast Asia.

The idea of opening a Swiss official representation in the Philippines was initiated in 1851, which finally culminated in the establishment of a Swiss honorary consulate in Manila in 1862. Since then, exchanges between the two countries have flourished, particularly in the economic, cultural, social and political spheres.

Philippine-Swiss business relations thus go back to the last century with some big Swiss business names figuring prominently alongside big names in Philippine business. Counted among these are Nestle Philippines, Holcim Philippines, Glencore Switzerland, SGS Philippines.

To date, there are over 60 Swiss companies present in the Philippines employing around 15,000 Filipinos. About one-third or 28% of said Swiss companies belong to the industrial sector, while 72% are in the service sector. In addition, there are a number of Filipino/Swiss family-owned enterprises running small resorts and dive shops scattered around the archipelago.

Major exports of the Philippines to Switzerland are medical instruments, mineral compounds, electrical machines, textiles and apparel and other machinery.

Meanwhile, major Swiss exports to the Philippines include watches, pharmaceuticals, agricultural products like cheese and chocolate and non-electric machines.

As of end-2015, Switzerland is the Philippines’ 25th trading partner with total bilateral trade valued at $556 million. In 2015, PH exports to Switzerland increased by 6.47%. These figures are foreseen to increase with the Free Trade Agreement between the Philippines and the European Free Trade Association coupled with trade promotion and cooperation activities under the Philippines-Switzerland Joint Economic Commission (JEC).

PHILIPPINES-SWITZERLAND JOINT ECONOMIC COMMISSION

The Philippines–Switzerland JEC is a venue to discuss trade, investment, economic cooperation and related matters to forge closer bilateral trade and investment ties between both countries. It also aims to promote sound business-to-business cooperation between the two countries.

In June 2013, then Trade Secretary Gregory L. Domingo and Swiss State Secretary for Economic Affairs Marie-Gabrielle Ineichen-Fleisch signed a memorandum of understanding to create a Joint Economic Commission between Philippines and Switzerland.

The agreement establishing the PH-Switzerland JEC was subsequently ratified in December 2013, followed by the first meeting of the JEC held in Manila in July 2014. During the first meeting of the JEC, the Philippine delegation was headed by then DTI Undersecretary Adrian Cristobal, while the Swiss side was headed by Ambassador Livia Leu, Head of Bilateral Economic Relations of the Swiss State Secretariat for Economic Affairs.

The Second Meeting of the Joint Economic Commission between the Philippines and Switzerland was convened on 27 April 2016 in Berne. Trade Undersecretary Nora K. Terrado headed the Philippine delegation, while Ambassador Leu again headed the Swiss delegation.

Philippine Ambassador to Switzerland Joselito A. Jimeno said the Second Meeting of the JEC was a great opportunity to express Philippine’s strong interest in pursuing a more extensive economic cooperation with Switzerland. In coordination with the DTI, the Philippine Embassy shall pursue all possible efforts to put the country in Switzerland’s radar of economic cooperation.

PHILIPPINES-EFTA FREE TRADE AGREEMENT

On 28 April 2016 in Berne, Switzerland, the Philippines through then Trade Secretary Adrian S. Cristobal Jr. signed its Free Trade Agreement with the European Free Trade Association (EFTA) composed of Switzerland, Norway, Iceland and Liechtenstein.

With this signing and subsequent ratification by the parties, Ambassador Jimeno believes the PH-EFTA FTA is expected to boost the flow of trade and commercial exchanges between the Philippines and EFTA countries.

The FTA has comprehensive coverage, including trade in goods (industrial and agricultural goods, fish and other marine products), rules of origin, trade facilitation, SPS, TBT, trade in services, investment, competition, protection of intellectual property rights, government procurement and sustainable development. A Joint Committee will oversee the implementation of the FTA. The Agreement will enter into force after completion of the necessary internal procedures for ratification by the Parties.

The following were the authorized signatories for the EFTA States:

• Mr. Johann N. Schneider-Amman, President of Switzerland and Head of the Federal Department of Economic Affairs, Education and Research of Switzerland
• Mr. Martin Eyjólfsson, Ambassador of Iceland
• Ms. Aurelia Frick, Minister of Foreign Affairs of Liechtenstein; and
• Ms. Dilek Ayhan, State Secretary of Ministry of Trade, Industry and Fisheries of Norway.

In November 2013, the Philippines formally sat down with the EFTA States and announced its interest to undertake negotiations for a Free Trade Agreement. This was followed by the signing in June 2014 of the Joint Declaration on Cooperation (JDC) which formalized the negotiation process.

A scoping paper was initialled by the parties on 24 November 2014 in Geneva, followed by five round of negotiations from March 2015 to February 2016, which subsequently culminated in the signing of the PH-EFTA FTA on 28 April 2016 in Berne, Switzerland.

With a combined population of over 13 million and a combined GDP of USD 1.2 trillion, the EFTA States are the world’s 9th largest merchandise trader and the 5th largest trader in commercial services, as well as significant actors in the area of foreign direct investment. They now have 27 FTAs with a total of 37 partners outside the European Union.

Under the FTA, the DTI said the Philippines can directly supply some products that EFTA currently imports from ASEAN or from the rest of the world (e.g. frames and mounting for spectacles; parts of gas turbines; ball bearings; hydraulic power engines; babies’ garments; undergarments; dresses; fresh/ dried bananas; palm oil; fresh/dried guavas; mangoes and mangosteens; fresh/dried pineapples; ballasts for discharge lamps or tubes; gear boxes and parts; safety airbags; mattress supports for bed frames; tobacco refuse; vinegar and fermented vinegar; smoking tobacco; glycerol; seaweeds and other algae; juice of fruit or vegetables; and jams, jellies and marmalades).

PHILIPPINES-SWITZERLAND TRAINEE AGREEMENT

The Philippines is the only country in Southeast Asia with which the Swiss government has signed a bilateral traineeship agreement.

The trainee agreement gives qualified young professionals of the Philippines and Switzerland the opportunity to work in gainful occupation for up to 18 months, receive remuneration due them and enrich the exchange of the rich culture and heritage of our respective countries and peoples.

In its 2013 Migration Report, the Swiss State Secretariat for Migration reported that out of a total of 118 permits issued to foreign nationals for traineeship in Switzerland, the Philippines accounted for 25% of the total foreign young trainees under the program.

Since the signing of the Philippine-Swiss Agreement in 2002, many Filipino trainees have gone to Switzerland and to be trained mainly in pharmaceutical, chemical, finance and health care sectors. Many of them have found employment as nurses and professionals in pharmaceutical and financial firms in Switzerland.

The Department of Labor and Employment said none of the Filipino trainees in Switzerland had been heard complaining about their work situations, indicating that Switzerland is a country that advocates for, and applies the principle of fair, ethical, secured and safe migration.