The European Union (EU) and the Philippines have stated their intention to work together to consider resuming discussions for a cutting-edge, fair, and sustainable free trade agreement (FTA). This bilateral “scoping process” aims to evaluate the level of agreement on the potential FTA. If successful, FTA talks between the EU and the Philippines can start up again soon.
The Commission’s president, Ursula von der Leyen, emphasized the Philippines’ significance as a significant partner in the Indo-Pacific area and voiced hope for taking the partnership to a new level. Together, she continued, “We will realize the full potential of our relationship, generating new business and consumer opportunities while also promoting the green transition and fostering a just economy.”
This declaration confirms the strategic importance of the Indo-Pacific region for the EU’s economic agenda and comes in the wake of the recent restart of FTA discussions with Thailand. The European Commission stated in a press release that the goal is to strengthen the EU’s alignment with this developing region and establish deeper commercial ties with the thriving South-East Asian economy.
In line with the Commission’s TSD review Communication from June 2022, the EU’s objectives for the FTA with the Philippines include ambitious market access commitments, effective sanitary and phytosanitary procedures, intellectual property rights protection, and strong disciplines on TSD. This agreement will place a strong emphasis on sustainability, with high standards for labor rights, environmental protection, and challenging climate targets.
Over €18.4 billion in goods were traded between the EU and the Philippines in the previous trading year, making the EU the Philippines’ fourth-largest trading partner. Additionally, with foreign direct investment stock expected to reach €13.7 billion in 2021, the EU is one of the biggest investors in the Philippines.
The Philippines benefits from special incentives and duty-free access to the EU market for two-thirds of tariff lines under the Generalized Scheme of Preferences Plus (GSP+) of the EU. Respect for international agreements on human rights, decent governance, and environmental preservation is necessary for continued access.
The EU and Philippines began FTA negotiations in 2015, however, they have been inactive since 2017. The new administration, which assumed power on June 30, 2022, has stated that it is eager to work with the EU on important matters.
This development confirms the EU’s interest in continuing FTA negotiations with the Philippines and is consistent with the EU’s Indo-Pacific Strategy for 2021. This move further demonstrates the EU’s dedication to enhancing commercial relations with the ASEAN area, which is already supported by existing FTAs with Singapore and Vietnam, ongoing negotiations with Indonesia and Thailand, and a scoping exercise with Malaysia.
Von der Leyen and President Ferdinand Marcos also introduced the Team Europe Initiative on Green Economy under Global Gateway, which is an important step toward a sustainable future. The project is supported by a €466 million commitment from Team Europe.
The Team Europe Initiative on Green Economy seeks to provide a business-driven replacement for the current plastic waste management system. The project aims to reduce plastic waste and marine litter while constructing sustainable plastic value chains.
