The food and beverage industry is Europe's largest manufacturing sector while agriculture accounts for more than a quarter of the gross domestic product (GDP) in several Association of Southeast Asian Nations (Asean) member­states.

In the Philippines, agri­food or food and beverage have a great future, especially if the time between now and when the Generalized Scheme of Preferences Plus (GSP plus) kicks in late this year are properly used.

As explained during European Chamber of Commerce of the Philippines (ECCP)'s first GSP plus forum, the food sector is among the sectors that will benefit most from GSP plus, given the fact that presently high duties will drop to zero.

Overview of agri­food in Asean and the EU:

Asean

Almost all countries in Asean are experiencing high economic growth accompanied by rapid changes in the consumption pattern. A growing middle class is developing preferences for food and beverages that are more convenient and packaged well, especially juices and premium beverage alcohols.

Through Asean's Economic Community blueprint, the seven priority areas for food, agriculture and forestry include:

·         Strengthening food security

·         Facilitating trade in agriculture and forestry products

·         Generating and transferring technology to increase productivity and develop agribusiness

·         Developing rural communities and human resources

·         Involving and investing in the private sector

·         Managing and conserving natural resources for sustainable development

·         Strengthening Asean cooperation in addressing regional and international issues

European Union

Together, the European food and drink industries are the largest manufacturing sector in the EU in terms of turnover, value added and employment. Overall, food and drink accounted for 6 percent of all EU exports in 2011 and 5 percent of all EU imports.

Distilled spirits are the EU's biggest agrifood exports with exports of €8.5 billion in 2011. While Asean and the EU markets offer great potential for enhanced trade and investment in agri­food, there continuous to be key issues in the regulatory space that is constraining development and growth:

1. Market Access

a. Tariffs, taxes and non­tariff barriers

b. World Trade Organization compliance

c. Technical standards and product classification rules

d. Labeling

e. Sanitary and phytosanitary standards (SPS)

f. Religion and halal standards

2. Other issues

a. Foreign investment restrictions

b. Intellectual property protection

c. Traceability protection

Key recommendations

As we are moving closer to Asean integration in 2015, here are key recommendations within the Asean­EU perspective:

·         Import tariffs and non­tariff barriers should be phased out over time;

·         All member­states should ensure their internal taxes and regulations are simple, transparent and fully compliant with WTO rules. (In the Philippines we are happy that the sin­tax reform has pushed through in 2012);

·         Labeling rules for packaged goods should be harmonized and simplified;

·         Technical standards/definitions and product classification rules should be based on internationally recognized standards;

·         The protection and enforcement of intellectual­property rights should be improved;

·         Asean should strongly consider traceability information legislation to protect consumers and support legitimate EU trade; and

·         Governments should consult industry on proposed amendments or any new regulations affecting the agri­food sector.

It is further recommend that the EU and Asean strengthen cooperation in the following key areas:

·         Trade­related capacity building support to regulatory and enforcement institutions in Asean;

·         Product safety, labeling and technical standards, and SPS acceptance;

·         Mutual recognition of food product registrations and of export establishments certified by the national competent bodies;

·         Export quality infrastructure, which includes testing laboratories and inspection agencies; and

·         Best practice customs valuation and transfer pricing frameworks for related party transactions.

In other words, there is plenty of work to do in preparing for increased trade of agri­food products in both directions.

Source: Business Mirror, 06 March 2014