This article is brought to you in association with the European Commission.
Today, the EU and the Philippines officially announced the resumption of negotiations for an ambitious, modern and balanced free trade agreement (FTA) – with sustainability at its core. Trade agreements such as these are a cornerstone of the EU’s economic security, opening new opportunities for businesses and consumers, strengthening supply chains and promoting sustainable trade practices. An FTA with the Philippines, a booming economy of 115 million people in the heart of the strategically important Indo-Pacific region, would therefore be a valuable addition to the EU’s network of trade deals.
The EU aims for a comprehensive FTA with the Philippines that includes ambitious market access for goods, services, investment and government procurement; the removal of obstacles to digital trade and trade in energy and raw materials, thereby supporting the digital and green transitions; swift and effective sanitary and phyto-sanitary (SPS) procedures; sustainable food systems (SFS); the protection of intellectual property rights including Geographical Indications (GIs) and robust and enforceable disciplines on trade and sustainable development (TSD) – in line with the Commission’s TSD review Communication of June 2022, supporting high levels of protection for workers’ rights, the environment, and the achievement of ambitious climate goals.
The EU and the Philippines already have well-established trade relations, with clear potential for an even closer relationship:
- trade in goods was worth over €18.4 billion in 2022, while trade in services was worth €4.7 billion in 2021;
- the EU is the Philippines’ 4th largest trade partner;
- the Philippines, the 5th largest economy in the ASEAN region, is the EU’s 7th most important trading partner in the region (and 41st worldwide);
- the Philippines is among the fastest growing emerging economies in the world, projected to see the 2nd highest economic growth in ASEAN with 5.9% GDP growth in 2024;
- the EU is one of the largest investors in the Philippines, with the EU’s foreign direct investment stock in the Philippines reaching €13.7 billion in 2021.
In addition to being a significant and growing economy, the Philippines also has major reserves of critical raw materials, including nickel, copper and chromite, which are vital for the manufacture of green technologies. Combined with the Philippines’ renewed efforts to harvest its renewable energy potential and recent liberalisation for foreign investors in the sector, the Philippines is an important partner in the green transition.
Next steps
The EU and the Philippines will now make their respective technical preparations for the first round of the resumed negotiations, expected to take place later this year.
Background
The EU and the Philippines first launched negotiations for an FTA in 2015. The last negotiating round took place in 2017 and negotiations have since been on hold. On 30 June 2022, the current administration assumed office and has shown willingness to engage with the EU on key issues of importance. In 2023, the EU and the Philippines launched a stocktaking exercise to assess their readiness to resume negotiations for an FTA, which was concluded at the end of 2023, confirming that a resumption of negotiations would be appropriate.
The 2021 EU Indo-Pacific Strategy confirms the EU’s longstanding interest in resuming FTA negotiations with the Philippines. The EU already has state-of-the-art FTAs in place with two ASEAN countries (Singapore and Vietnam), is negotiating FTAs with Indonesia, Thailand, and is carrying out a stocktaking exercise with Malaysia.
The Philippines currently enjoys trade preferences under the EU’s Generalised Scheme of Preferences + (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. This enhanced access is conditional on the Philippines implementing a range of international conventions covering issues such as human and labour rights, good governance, and environmental protection. The EU will continue to monitor the Philippines’ compliance with its international obligations in these areas and pursue its ongoing dialogue to encourage further improvement.
For More Information
EU-Philippines trade relations
Quote(s)
We are one step closer to a prosperous new partnership thanks to the EU and the Philippines resuming trade negotiations. A modern, comprehensive and values-based free trade agreement with this fast-growing economy would open new opportunities for both sides, strengthen our supply chains, and promote sustainable trade. It would also deepen ties with a key partner in the burgeoning Indo-Pacific region.
Valdis Dombrovskis, Executive Vice-President and Commissioner for Trade
Leave a Reply