Philippines sets talks on free trade deal with EU

MANILA, Philippines - The Philippines has finally secured the European Union’s nod to start  negotiations for the much sought-after free trade agreement (FTA) with the 28-member economic bloc, the Department of Trade and Industry (DTI) said.

The DTI said yesterday Trade Secretary Gregory Domingo and EU Trade Commissioner Cecilia Malmström have agreed to start  talks for a Philippines-EU FTA next year.

The negotiations will aim to conclude a deal that covers a broad range of issues such as elimination of customs duties and other barriers to trade, services and investment, access to public procurement markets, and additional disciplines in the area of competition and protection of intellectual property rights.

The DTI said the prospective agreement would also include a comprehensive chapter that would ensure 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+ last year and expand this preferential access to substantially all the traded products to EU. As with our recent experience with GSP+, we are optimistic that investments will start to come in with improvements in market access,” Domingo said.

The first round of negotiations is expected to take place in the Philippines in the first half of next year.

“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,” Domingo said.

Trade Assistant Secretary Ceferino Rodolfo, in an interview earlier this month, reported the country was about to conclude the scoping negotiations with the EU.

The Philippines has been on the scoping phase for its FTA negotiations with the EU since 2013, with the EU closely looking at the economic reforms being undertaken by the country to advance the FTA negotiations.

The Philippines is now the fifth country of the Association of Southeast Asian Nations (Asean) to start negotiations for a bilateral FTA with the EU.

So far, the DTI said 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 P738 billion.

The country, on the other hand, is EU’s sixth largest trading partner in Asean and 44th worldwide.

The Philippines’ largest exports to the EU are office and telecommunication equipment accounting for 45 percent of total, followed by machinery and food products at 15 percent and 12.5 percent, respectively.

The EU is also the largest foreign investor in the Philippines, with a foreign direct investment stock in the country of over P366 billion.

Since the end of 2014, the Philippines has been benefiting from the enhanced trade preferences granted by the EU under the Generalised Scheme of Preferences plus (GSP+).

The EU-GSP+ is a preferential tariff scheme that allows the Philippines to export more than 6,000 products to any EU member country tariff free.