MANILA – The Philippines and the European Union on Tuesday agreed to start negotiations for a free trade agreement, which aims to bolster their economic exchanges and increase market access from both sides.
In a statement from Brussels, the EU called the launch of trade talks with the Philippines “an important milestone” in the EU-Philippine relations and a further evidence of the bloc’s commitment to Southeast Asia, said EU Trade Commissioner Cecilia Malmström.
“The Philippines has been one of the fastest growing economies in the region in the recent years. We need to make sure our companies enjoy right conditions to seize the great potential of that market of 100 million consumers,” Malstrom said following talks with Philippine Trade Secretary Gregory Domingo at the EU headquarters in Brussels.
The first round of negotiations is expected to take place in the first half of 2016 in the Philippines.
Both sides, the statement said, hope to conclude an agreement that will eliminate customs duties and other barriers to trade, services and investment, access to public procurement markets, as well as additional disciplines in the area of competition and protection of intellectual property rights.
The prospective agreement will also include a comprehensive chapter that will ensure that closer economic relations between the EU and the Philippines go hand in hand with environmental protection and social development.
The Philippines is the fifth Association of South East Asian Nations member-state to negotiate for a bilateral free trade agreement with the EU. Other members are: Indonesia, Thailand, Malaysia, Singapore, Brunei, Vietnam, Laos, Cambodia and Myanmar.
ASEAN, as a whole, ranks as the 8th economy in the world and the EU’s 3rd largest trading partner outside Europe, after the United States and China. Bilateral trade in goods and services between the EU and ASEAN reached €235 billion in 2013.
Negotiations for a region-to-region Free Trade Agreement (FTA) with ASEAN were launched in 2007 and paused 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 Vietnam this 2015.
The Philippines is the EU’s 6th largest trade partner in ASEAN and ranks 44th worldwide.
In 2014, the EU exported to the Philippines goods worth €6.8 billion, while the EU imports from the Philippinesamounted to €5.7 billion. This made the EU the Philippines’ fourth largest trading partner.
EU exports mostly transport equipment, machinery, food, chemicals and electronic components to the Philippines, while Manila mainly exports office and telecommunication equipment, machinery, food products, and optical and photographic instruments to Europe.
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.
Since the end of 2014, the Philippines has enjoyed tariff-free privileges on certain products under the EU’s Generalized Scheme of Preferences (GSP).