Philippines pushes resumption of EU FTA talks

MANILA, Philippines — The Philippines continues to push for the resumption of negotiations for a free trade agreement (FTA) with the European Union (EU), saying  this will provide a more permanent mechanism in the country’s economic relationship with the EU.

This was stressed by Trade Secretary Alfredo Pascual as he met with European Commission Vice President/Trade Commissioner Valdis Dombrovski in Brussels, Belgium.

Pascual emphasized the need to resume the PH-EU FTA negotiations, citing the demand of the business sector such as the EU-ASEAN Business Council (ABC), European Chamber of Commerce of the Philippines (ECCP), the German-Philippine Chamber of Commerce and Industry (GPCCI) and other industry associations.

“To maintain strong economic relations with the EU, it is important that a PH-EU FTA is in place before the Philippines eventually loses its GSP+ (Generalized Scheme of Preferences-Plus)  status due to continued economic growth. With the country’s positive trajectory towards reaching upper-middle income status, it is high time for the Philippines and the EU to resume FTA negotiations,” said Pascual.

“The PH-EU FTA would be a strategic platform for economic engagement for the EU in the Indo-Pacific and PH can well serve as its strategic trade partner,” he said.

Based on the Department of Trade and Industry (DTI)’s website, the launch of Philippines-EU FTA negotiation was announced in December 2015. The first round of negotiations was held on May 23 to 27 in Brussels, Belgium, while the second round of negotiations was held on Feb. 13 to 17 in Cebu.

Apart from the resumption of FTA negotiations, Pascual also stressed the importance of the EU Generalized Scheme of Preferences-Plus (GSP+) to stakeholders, and how the same contributed to promoting inclusiveness and socio-economic development in the country.

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“The continuation of EU GSP+ is beneficial both for the Philippines and the EU in driving inclusive growth and sustainable development,” Pascual said referring to the impending expiration of the country’s access to the EU GSP+ by the end of the year.

In 2022, €2.93 billion worth of PH products were exported to the EU using GSP+ rates, which yielded a utilization rate of 77 percent, the highest utilization rate that the Philippines logged.

Pascual further underscored the necessity of finalizing the GSP regulation to provide business certainty both for Filipino exporters and EU importers.

For his part, Dombrovskis responded that the Philippines should await the result of the EU’s ongoing trialogue deliberation on the finalization of the new GSP scheme regulation.

He also expressed appreciation for the openness of the Philippines to trade and investments, especially the recent major economic reforms introduced by the country in the areas of public services and renewable energy.

Dombrovskis said he recognizes the value and importance of the EU GSP Plus in enhancing PH-EU trade relations.

To show the current administration’s resolve to work closely with the EU, Pascual gave an update on recent developments in the country such as the country’s participation in the Regional Comprehensive Economic Partnership (RCEP) agreement, the export strategy of the Philippines, the institutionalization of the Philippine Open Government Partnership, as well as developments in the areas of environment and good governance.

In 2022, the EU was Philippines’ 5th largest trading partner valued at €15.231 billion in total trade (7.63 percent share to PH total trade); 6th export market with €7.96 billion, and 6th import supplier valued at €7.14 billion.

The EU represents around 8 to 11 percent of the Philippines’ exports and about 24 to 28 percent of PH’s total exports to the EU are using GSP+ rates.

“From about €5.3 billion in 2014, Philippine exports to the EU is now €10.4 billion as of 2022,” the DTI said.

It emphasized that the EU has been one of the largest foreign investment partners of the Philippines with total investments amounting to around €836 million in 2021 and 2022. Most of these investments were recorded in manufacturing, information and communication, real estate, and administrative sectors.