Philippine Rattan Furniture Exporter Takes Advantage of FTAs
FTAs are free trade agreements and they mean a company based in one country is able to export to another with no import duty thus reducing the cost of imported goods. Thanks to these one rattan furniture exporter has been able to weather the current US and European slowdown. With an economic crisis in both US and European economies Obra Cebuana, a rattan furniture exporter based in the Philippines decided to take a share of their exports elsewhere. Having previously exported 70% to the US Obra Cebuana reduced this to 30% and focused on new emerging markets where FTAs helped to secure deals. Edwin Rivera, general manager of Obra Cebuana said, “The United States is still the biggest market but when the global financial crisis erupted in 2008, we started not to become totally dependent on the US market alone, we re-engineered our rattan, diversified our markets and maximized the country’s FTAs.” These FTAS have meant that Obra Cebuana are now exporting to new markets in Mexico, Brazil, Chile as well as their neighbouring Asian countries.
n Fact Obra Cebuana are hoping for more bilateral or regional FTAs with China, Japan, Chile and Brazil said Rivera, “What we are also looking at now is the market opening in Japan, considering that our bilateral trade agreement is under review. We hope to export our furniture to hotels in Japan.” Another possible problem for the Philippine based exporter is the exchange rate Rivera said, “If the forex would go lower than P42 (to the dollar), then we’ve got a big problem.”
More information on FTA's can be found at http://trade.gov/fta/