The new administration looks to be pushing ahead with negotiations for a European Union-Philippines Free Trade Agreement – an initiative which was started last December and held its first round of discussions in Brussels last month.
Described by EU Trade Commissioner, Cecilia Malmström, as “an important milestone in EU-Philippine relations and further evidence of the EU’s commitment to Southeast Asia,” the trade treaty’s general framework has now been mapped out. The Philippine Department of Trade and Industry believes that it will improve duty-free market access, promote investment and create jobs.
Once enacted, it will replace the EU’s General Scheme of Preferences-Plus arrangement which has allowed free access for more than 6,000 Philippine products to EU markets. The Philippines has also had a Partnership and Cooperation Agreement with the EU since July 2012.
The new framework includes the elimination of customs duties and other trade, services and investment barriers, provisions for access to public procurement markets, and additional disciplines for competition and the protection of intellectual property rights. Environmental protection and social development issues are also included.
Currently, the Philippines, the fifth country within the Association of Southeast Asian Nations to start negotiations with Brussels, is the EU’s 44th largest trading partner worldwide, while the EU is the Philippines fourth largest. Bilateral trade between the two countries reached US$15.64 billion last year. How much that is affected by the United Kingdom’s withdrawal from the EU remains to be seen – the UK has the highest level of direct investment stock in the Philippine’s and is the country’s largest European investor. Philippine trade opportunities from Brexit
The Philippines has been seeking a trade treaty with the EU since 2013, while the EU, for its part, has been assessing the introduction of economic reforms in the Philippines to ensure the country’s legislation and practices broadly comply with European regulations.
Ms Malmström is now eager to conclude the negotiations. “The Philippines has been one of the fastest growing economies in the region in the recent years. We need to make sure our companies enjoy the right conditions to seize the great potential of that market of 100 million consumers,” she said at the announcement of the FTA talks.
The Nordic Business Council of the Philippines and the European Chamber of Commerce of the Philippines (ECCP) have separately expressed their hopes that the new administration will show its commitment to the FTA when the second and final round of talks takes place. The ECCP believes that growth for agriculture and tourism should be priorities in any commitment which the Philippines makes to the EU treaty.