MANILA, Philippines — The fisheries sector, particularly tuna, appears to be the most contentious issue once the Philippines enters into formal bilateral trade negotiation with EU with the Philippines most likely to take an offensive stance in this major export product to the 27-nation economic bloc and protect the likely losers – the small fisherfolks.

This developed after the Philippine Institute for Development Studies presented their studies on the impact of the Philippines-EU FTA at yesterday’s consultations with industry stakeholders organized by the Department of Trade and Industry.

“Based on the study, it shows we have offensive interest in the fisheries sector,” said DTI Undersecretary Adrian S. Cristobal Jr.

Cristobal noted the tariff disparity on the Philippine exports of processed tuna to EU, the non-tariff barriers and the impact on the small fisher folks, who are likely to be the losers in the fishery sector once the FTA materializes.

Given all the other consideration aside from the fishery sector concerns, Cristobal declared “We are not yet ready. This is definitely just a start of the scoping exercise.”

“The study also shows some impact on the small fisher folks that if we have to pursue we really nee lots of preparations and technical assistance to sub-sectors. What is clear is when we negotiate for entity like EU there are sectors within that have more substantial interest on us,” Cristobal said.

Based on the study on “The Economic and Distributional Impacts on the Philippine Fisheries Sector of a Potential Free Trade Agreement with the European Union” by PIDS economist Dr. Danilo C. Israel, the Philippines incurred balance of trade surpluses annually for the period 2000 to 2010 in its fish trade with EU.

The country’s biggest exports to EU went to Germany with 34.5 percent followed by the UK 17.4 percent and Spain 10.3 percent.

On the other hand, during the same period, the largest share of Philippine fisheries imports from the EU originated from Spain with 72.6 percent followed by UK with 13.2 percent and Portugal with 4.9 percent.

This made Israel to say that, “On fisheries, we look nice and easy on EU”, but he hastened to add that EU has the highest tariff on fish, second only to Korea.

For instance, EU imports of canned tuna from the Philippines are slapped with a high tariff of 24 percent in contrast to zero tariff for canned tuna imports from the Africa, Caribbean and the Pacific (ACP) countries. For other countries, EU imposed a 16.3 percent tariff on processed seafood, 10.4 percent on raw fish and 4 percent on intermediate seafood products.

In 2008, the country posted a total fish output of 4.4 million metric tons which was approximately 3.2 percent of word fisheries production and the 8th largest.

While the Philippines, generally has been a net imported of fish in terms of volume, it has been a net exporter in terms of value in the last three decades.

“The Philippines can negotiate that its exportation of canned and other processed products to the EU will be imposed much lower or no tariffs to put the country at a level playing field with ACP countries. A complementary option is to ask for a much higher quota,” the study said.

For the period 2003-2008, Israel said, the EU granted the Philippines only 9,000 tons of quota for its annual tuna exports which the country can supply in just a matter of three months.

Cristobal said the Philippines can ask for better market access with the reduction in tariff to even the playing field with ACP countries.

“But the tariff is not the entire story, we should also look at other issues like sanitary and phyto-sanitary measures,” he said.

Non-tariff measures like custom and administrative procedures and SPS appear to have the highest incidence of use among countries.

In the past, EU imposed bans on imports from developing countries citing food safety concerns in processing or contamination prior to catch.

The EU also delegates authority for the implementation and enforcement of its food safety legislation to exporting country authorities posing major challenge to small local industries in developing countries.

The EU also requires a 0.02 parts per million in lead content in tuna and other fishery exports from ASEAN countries. ASEAN has been lobbying for the application of a 0.03 ppm maximum allowable lead content.

Based on the study analysis, the large scale fishing sector is expected to benefit from the Philippine-EU FTA, but the small scale would be adversely affected.

In addition, the study said that freer trade of fisheries products would have a significant and negative impact on Philippine fish stocks and resources and exacerbate the overexploitation and abuse if left unchecked.

“If a Philippine-EU FTA materializes, it should not only significantly reduce or eliminate tariffs in fisheries products but also NTMs that currently impede the flow of trade and place the Philippine fisheries sector at a disadvantage,” the study said.

Since there are likely losers in fisheries such as the local poor fishermen and other small scale players, the government should provide some form of safety nets to them.