Free trade deal, a pipe dream

The Philippines and the European Union (EU) are resuming negotiations for a free trade agreement (FTA). This was jointly announced at Malacañang Palace last Monday after the meeting of President Ferdinand “Bongbong” Marcos Jr. (PBBM) with European Commission (EC) president Ursula von der Leyen. The EC president also took up with PBBM the renewed interest about the bright prospects for the EU bloc to actively engage anew with the Philippine government now under the new administration of PBBM.

The EC President is here in Manila for a two-day visit at the invitation of President Marcos. The two leaders first met when PBBM attended the EU-ASEAN (Association of Southeast Asian Nations) Commemorative Summit held in Brussels, Belgium in December last year. It is actually a reciprocal state visit of the EC president, who is a German currently heading the 28 countries comprising the European Union (EU).

PBBM and some of his Cabinet members led by Finance Secretary Benjamin Diokno joined a state banquet for the EC delegation at Malacañang. Von der Leyen, according to Diokno, told PBBM that she is very well updated about the latest developments in the Philippines because her two daughters are working here as NGO (non-government organizations) advocates.

The Philippines currently enjoys the EU’s Generalised Scheme of Preferences + or GSP+, a special incentive arrangement for sustainable development and good governance which grants duty-free access to the EU market for two-thirds of tariff lines. However, the negotiations for the EU-Philippines FTA that were started in 2015 have been on hold since 2017 during the term of former president Rodrigo Duterte. It was on the heels of the alleged human rights abuses charges against the Duterte administration’s all out war against illegal drugs in the Philippines.

The tough-talking Mr. Duterte pushed back and publicly lashed at EU for setting conditions that linked the human rights issues before any grant of GSP extension to the Philippines. Thus, the negotiations have been put on hold. Incidentally, the last round of the negotiations on the proposed FTA with EU were held in Cebu City in 2017.

Speaking of Cebu, the third round of the Asia-Pacific Economic Cooperation Advisory Business Council (APEC-ABAC) conference held in Mactan, Cebu was concluded last Sunday with new sets of recommendations, other than FTA.

At the end of the ABAC-3, Dominic Ng who chairs the ABAC-2023, conceded the FTA negotiations are long-drawn process that will take years to complete, if ever one agreement is reached.

Ng, a Chinese-American business leader actively involved in the annual ABAC meetings, admitted the FTA is also a dream goal for the APEC. He stressed the proposed FTA deals will certainly benefit the 21 APEC member-economies should all agree to be part of this desired seamless trading arrangement.

“But here, it is the business leaders are the driving force. We are the ones that come out with recommendations solutions, and ideas. Some of them are big ideas and take years to accomplish. Like it may take years to get free trade area within the region,” Ng pointed out.

“The very special thing about ABAC is it’s about consensus and is something that economic leaders can find a platform that they can get together and talk about challenges and opportunities within the region. And this is only forum in a way that get very, very active involvement from the business sector,” Ng argued.

This was his take on what has the APEC achieved in concrete measures to bring about greater trading activities since it was established in 1995. From the original 12 founding members that included the Philippines and the United States (US), the APEC now has 21 member-economies, the latest of which is Croatia.

If at all an accomplishment, the APEC Lanes at the airport’s immigration section is the only visible output of this yearly Leaders’ Summit. And the ABAC Business Travel Cards, Ng added, taking up the cudgels for the APEC Leaders.

Ng commended though the APEC Leaders for including the businessmen in their yearly summits unlike at the G-7 or the G-20 that meet every year, too. “And we feel very confident that through this consensus building and private-public partnership is a very, very meaningful alternative way than any other types of forums like those currently taking place around the world,” Ng cited.

“Because when you talk about G-7 and some of the other types of settings, the businessman are not part of those discussions. So it is the political leaders that among themselves obviously they are making impact through those events,” he pointed out. “The APEC has really made a great impact. And that’s how we’re able to dialogue with the leaders,” Ng recalled.

Attending the ABAC-3, APEC Senior Official Chair Matt Murray officially relayed the invitation to PBBM to attend and be a keynote speaker in one of the major events at the 30th APEC Leaders’ Summit to be held this November in San Francisco, California. The US is this year’s host of the APEC Leaders’ Summit. The fourth and last round of the ABAC would take place alongside with the APEC Leaders’ Summit.

PBBM flew all the way to Cebu last Thursday and keynoted the ABAC-3 organized by the Private Sector Advisory Council (PSAC) Convenor Sabine Aboitiz, president and chief executive officer of Cebu-based Aboitiz Equity Ventures. Aboitiz expressed confidence the Philippines stands to reap the many beneficial gains out of the yearly APEC Leaders’ Summit.

“I relate this to smaller group PSAC as example. What the APEC Leaders will take is just as good as the inputs we give them,” Aboitiz pointed out. “I see clearly that our recommendations are practical. They are more direct,” he added.

It was only when the COVID-19 pandemic struck in 2020 and in 2021 that Aboitiz noted the APEC “slipped a little bit.”

PBBM attended his first APEC Leaders’ Summit held in Thailand when it resumed its onsite meeting last year.

Except for the usual declaration that caps the end of the APEC Leaders’ Summit, any FTA – like what EU offers – remains a pipe dream.