The Department of Trade and Industry said the Philippines and the European Union (EU) will launch the first round of negotiations for a free-trade agreement (FTA) in May. Trade Undersecretary Ceferino S. Rodolfo said negotiations for an FTA could be concluded in two to three years.
“The pace of [negotiations] will be dictated by our ensuring the continued access to the EU market. We want to make sure that by the time we graduate from the EU-GSP+ [EU under the Generalized System of Preferences Plus], we’ve already secured the FTA,” Rodolfo told the BusinessMirror.
Since December 2014, the Philippines has been benefiting from the enhanced trade preferences granted by the EU-GSP+. Under the EU-GSP+, tariff rates on some 6,200 Philippine products were slashed to zero.
As of end-June 2015, exports of Philippine products covered by the EU-GSP+ expanded by 27 percent or to €742,788.28 from €584,292.58 in 2014, according to Walter Van Hattum, economic and trade section chief of the EU delegation in Manila.
Securing an FTA with the EU, Rodolfo said, would result in higher shipments of Philippine products to European countries.He said the Philippines is particularly keen on expanding shipments of farm products to European countries. Negotiations for a region-to-region FTA between the EU and the Association of Southeast Asian Nations (Asean) were launched in 2007 and were put on hold 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 in 2014 and with Vietnam last year.
The Philippines is the EU’s sixth-largest trade partner in Asean and ranks 44th worldwide.
In 2014 the EU exported goods worth €6.8 billion to the Philippines, while EU imports from the Philippines amounted to €5.7 billion. EU exports to the Philippines consisted mostly of transport equipment, machinery, food products, chemicals and electronic components. The country’s main exports to European countries include office and telecommunication equipment, machinery, food products and optical and photographic instruments.
The trade in services between the EU and the Philippines was worth €3 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 €6.2 billion.