BRUSSELS, Belgium — The Philippines and the European Union have declared their intention to restart negotiations for a Free Trade Agreement (FTA) that aims to significantly enhance bilateral trade. The announcement came from Department of Trade and Industry (DTI) Secretary Alfredo Pascual and European Commission (EC) Executive Vice President Valdis Dombrovskis during a joint press briefing.
According to Philippines News Agency, the FTA aims to build upon the already robust trade ties between the EU and the Philippines, which have seen considerable growth over the last decade. He outlined that the agreement could potentially boost bilateral trade by as much as 6 billion euros. The EU stands as the fourth largest trading partner for the Philippines, with bilateral goods trade reaching 18.4 billion euros in 2022 and services trade amounting to 4.7 billion euros in 2021. Additionally, the EU is a significant source of foreign direct investments in the Philippines, contributing 13.7 billion euros in 2021.
Negotiations for the EU-PH free trade deal were paused in 2017 due to the EU's humanitarian concerns, particularly regarding the Philippines' approach to drug-related issues. However, Dombrovskis acknowledged improvements made under President Ferdinand R. Marcos Jr.'s administration, including shifts in drug policy towards prevention and rehabilitation, which have paved the way for resuming trade discussions.
Secretary Pascual emphasized the Philippines' objectives for the FTA, highlighting the intention to secure and extend the benefits of the current EU Generalised Scheme of Preferences Plus (GSP+) and to facilitate technology transfer and capital investment from EU companies, particularly in the field of mineral processing. This strategy aims to add value within the Philippines rather than exporting raw materials.
The move to resume FTA negotiations follows a visit to Manila by EC President Ursula von der Leyen from July 31 to August 1, 2023, where she expressed the EU's interest in rekindling trade talks. Subsequent to her visit, Philippine and EU officials conducted comprehensive stocktaking exercises from September to December last year, setting the stage for the future of their trade relationship.