Philippine Secretary of Trade and Industry Gregory Domingo and EU Trade Commissioner Cecilia Malmström today agreed to start negotiations for a Philippines-EU free trade agreement (FTA).
Both sides share the ambition to conclude an agreement that covers a broad range of issues, including elimination of customs duties and other barriers to trade, services and investment, access to public procurement markets, as well as additional disciplines in the area of competition and protection of intellectual property rights. The prospective agreement will also include a comprehensive chapter that will ensure that closer economic relations between the Philippines and the EU go hand in hand with environmental protection and social development.
“EU is one of the country’s largest trading partner and investment source. We would like to lock in the duty-free market access we obtained through the EU GSP-plus last year and expand this preferential access to substantially all the traded products to EU. As with our recent experience with GSP-plus, we are optimistic that investments will start to come in with improvements in market access” said Secretary Domingo. He added that “With improved market access and greater opportunity for investments, supported by commitments on sustainable development, we are confident that this FTA will contribute to the country’s objective of creating decent jobs”.
The first round of negotiations is expected to take place in the first half of 2016 in the Philippines.
The Philippines is one of the 10 members of the Association of South East Asia (ASEAN), as well as the 5th largest economy in the region and the 2nd biggest market in ASEAN. It is also the 5th country of the ASEAN to start negotiations for a bilateral free trade agreement with the EU.
Taken as a whole, ASEAN ranks as the 8th economy in the world and the EU's 3rd largest trading partner outside Europe, after the United States and China. Bilateral trade in goods and services between the EU and ASEAN reached PHP13 trillion in 2013.
Negotiations for a region-to-region FTA with ASEAN were launched in 2007 and paused in 2009 to give way to a bilateral format of negotiation. These bilateral FTAs were conceived as building blocks towards a future region-to-region agreement. So far, the EU has completed bilateral agreements with Singapore (2014) and Vietnam (2015).
EU is the Philippines’ fourth largest trading partner with bilateral trade amounting to PHP 738 billion. On the other hand, the Philippines is EU's 6th largest trading partner in ASEAN and 44th worldwide. The Philippines’ main exports to the EU were office and telecommunication equipment (45%), machinery (15%), food products (12.5%), and optical and photographic instruments (11%). Philippines’ imports from the EU were transport equipment (31%), machinery (15%), food products (13%), chemicals (11.5%), and electronic components (11%).
The trade in services between the EU and the Philippines was worth PHP 169 billion in 2013.
The EU is also the largest foreign investor in the Philippines, with a foreign direct investment stock in the country of over PHP 366 billion.
The Philippines-EU relation is governed today by the Partnership and Cooperation Agreement signed in July 2012. The Philippines has been also benefitting since the end of 2014 from the enhanced trade preferences granted by the EU under the Generalised Scheme of Preferences (GSP)-plus. (END)