Manila, 31 August 2023 (TDI): The European Union (EU) and the Philippines have recently declared their intent to examine the possibility of restarting discussions for a comprehensive, modern, and equitable free trade agreement (FTA), with a primary focus on sustainability.
This declaration came during President Ursula von der Leyen’s official visit to the Philippines. The announcement marks the commencement of a bilateral ‘scoping exercise’ to evaluate the mutual understanding of both parties regarding the prospective FTA.
Should this exercise conclude positively, and following consultations with Member States, the EU and the Philippines could be positioned to recommence FTA discussions.
European Commission President Ursula von der Leyen highlighted the strategic significance of the Philippines as a crucial partner in the Indo-Pacific region and expressed optimism that the scoping exercise would lay the foundation for a more robust partnership.
She underscored the potential advantages of the agreement, including new prospects for businesses and consumers, backing for the green transition, and advancing a fair economy.
This declaration follows the earlier resumption of FTA discussions with Thailand and underlines the significance of the Indo-Pacific region in the EU trade agenda.
The EU targets a comprehensive FTA with the Philippines, encompassing ambitious market access commitments.
Additionally, the agreement will feature robust and enforceable disciplines on Trade and Sustainable Development (TSD), aligned with the Commission’s TSD review Communication from June 2022.
The EU and the Philippines maintain well-established trade relations, with the trade in goods valued at over 18.4 billion euros in 2022 and trade in services valued at 4.7 billion euros in 2021.
The EU ranks as the Philippines’ fourth-largest trade partner, while the Philippines is the EU’s seventh most important trading partner in the ASEAN region and 41st globally.
The EU is also a significant investor in the Philippines, with foreign direct investment stock amounting to 13.7 billion euros in 2021.
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Currently, the Philippines benefits from trade preferences under the EU’s Generalised Scheme of Preferences + (GSP+), which provides duty-free access to the EU market for two-thirds of tariff lines, conditional on the implementation of international conventions on human and labour rights, good governance, and environmental protection.
EU-Philippines FTA Negotiations
The EU and the Philippines initially launched discussions for an FTA in 2015. The last round of negotiations occurred in 2017, and discussions have been paused since then.
On 30 June 2022, the new administration took office and has demonstrated a willingness to engage with the EU on key areas of importance.
The 2021 EU Indo-Pacific Strategy reaffirmed the EU’s longstanding interest in restarting FTA discussions with the Philippines.
The EU already has cutting-edge FTAs with two ASEAN countries (Singapore and Vietnam), is in FTA discussions with Indonesia, will shortly recommence FTA discussions with Thailand, and is presently conducting a scoping exercise with Malaysia.
Valdis Dombrovskis, Executive Vice-President and Commissioner for Trade expressed his enthusiasm for the restart of discussions for a trade deal with the Philippines.
He highlighted that a modern, comprehensive free trade agreement would unlock new opportunities for both parties, fortify supply chains, and promote sustainable trade.
Moreover, he noted that the restart of trade discussions with the Philippines, following the recent restart of trade discussions with Thailand, showcases the EU’s earnest commitment to reinforcing its ties with the flourishing Indo-Pacific region.
