Philippines-European Union FTA talks resume in H2

MANILA, Philippines — The Philippines and the European Union (EU) are looking to resume formal negotiations for a free trade agreement (FTA) in the early part of the second half of the year, according to the Department of Trade and Industry (DTI).

“The formal face-to-face negotiation would be around the early second half of the year, around the third quarter because of preparatory work to be conducted,” Trade Secretary Alfredo Pascual told reporters.

Last week, Pascual and European Commission executive vice president and trade commissioner Valdis Dombrovskis announced the resumption of talks between the Philippines and the EU soon.

Talks were put on hold after the last negotiating round in 2017, amid the EU’s concerns on human rights issues as the previous administration waged its war against illegal drugs.

Dombrovskis said positive developments that have taken place recently put the parties in the position to get the trade talks rolling once again.

The Philippines is currently a beneficiary of the EU’s Generalized Scheme of Preferences Plus (GSP+), which grants duty-free access to the EU market for 6,274 products.

As a condition to enjoying the trade preference, the Philippines has to implement a range of international conventions covering issues such as human and labor rights, good governance and environmental protection.

Last year, the Philippines and the EU launched a stocktaking exercise to assess their readiness to resume negotiations for the FTA.

“The stocktaking exercise showed that there is a very strong alignment of desires and ambitions,” Pascual said.

For the Philippines-EU FTA, the DTI said the aim is to go beyond the benefits of the GSP+ through enhanced market access for goods, services and investments.

The FTA is expected to ensure mutual market access and diversify supply chains, offering more opportunities for professionals and service providers.

It is also expected to enable the country to attract more investments from the EU in key sectors such as infrastructure, digital technology, research, renewable energy and the green transition.

Pascual said the Philippines would want the FTA with the EU to allow consulting engineering firms owned by Filipinos to set up operations and hire employees from the host country.

“There are foreign firms operating in the Philippines and they are hiring Filipinos...They hire Filipinos, they pay the Filipinos domestic rate and then they charge based on their international rates. There is disparity. We should be able to bring the Filipino engineers there and then we pay the Filipino engineers based on the salary level in the host country,” he said.

Meanwhile, he said implementing rules and regulations (IRR) governing the licensing process for constructors will need to be amended to implement the decision of the Supreme Court with respect to licensing of foreign companies.

In 2022, the Supreme Court affirmed its 2020 decision that allows foreign construction firms to acquire regular licenses to participate in public and private projects across the country.

Pascual said there are ongoing public consultations on the necessary revisions to the IRR governing the licensing process.