Philippine exporters can tap a nearly 680-million consumer market by making better use of ASEAN free trade agreements (FTAs), which can help reduce tariffs, lower production costs, and improve competitiveness, according to the Department of Trade and Industry (DTI).

DTI Bureau of International Trade Relations Division chief Denise Cheska Enriquez urged businesses to look beyond tariff rates when choosing trade agreements, saying the most beneficial FTA is the one that companies can effectively use based on their supply chains and target markets.

Not always with the lowest tariff

“The best FTA is not always the one with the lowest tariff. It is the one your product can qualify for and your business can use effectively,” Enriquez said during the DTI-Export Marketing Bureau’s webinar on strengthening ASEAN trade connectivity.

She said exporters should maximize FTA benefits by claiming preferential tariffs, using regional inputs that comply with rules of origin, selecting the agreement most suitable for their operations, and taking advantage of simplified trade procedures.

Japan-bound exports

Enriquez cited Japan-bound exports as an example, noting that Philippine businesses may access multiple agreements, including the Philippines-Japan Economic Partnership Agreement, ASEAN-Japan Comprehensive Economic Partnership and Regional Comprehensive Economic Partnership.

“The agreement offering a zero or lower tariff may appear to be the obvious choice, but if you are unable to satisfy the requirements to access that lower tariff, then you will need to consider another agreement,” she said.

She added that companies must also consider market demand, as lower tariffs alone do not guarantee export success.