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DTI’s Pascual calls free trade agreement ‘essential’ to European Union relationship


TRADE Secretary Alfredo E. Pascual said a free trade agreement (FTA) with the European Union (EU) is “an essential mechanism in the Philippines’ relationship with the EU” and called for negotiations for an FTA to resume.

Speaking at a European Chamber of Commerce of the Philippines (ECCP) luncheon in Makati City on Thursday, Mr. Pascual pitched for FTA talks to resume, calling it a means of achieving the EU’s objective of diversifying its suppliers.

An FTA with the Philippines “is consistent with the EU’s Indo Pacific Strategy. And it supports the EU’s goal of diversifying suppliers and enhance its cooperation on supply chains in the ASEAN region,” Mr. Pascual said.

“A timely conclusion of the Philippines-EU FTA negotiations will further expand the scope of market access for goods, services, and investments. To be included are other fields that would facilitate trade between our economies. Most importantly, this will increase and facilitate commercial exchanges among our economies’ business sectors,” he added.

FTA negotiations commenced in 2016, with the last round of negotiations conducted in Cebu City in 2017.

Mr. Pascual told reporters that the relations between the Philippines and EU have improved compared to the previous administration, with President Ferdinand R. Marcos, Jr. having already visited Brussels during his term. He also attended the Davos conference in Switzerland, a non-EU member.

Mr. Pascual also sought the ECCP’s assistance in pushing for the conclusion of the FTA.

He added that 83% of German companies view the resumption of the FTA talks as important, citing the findings of a survey by the German-Philippine Chamber of Commerce in 2020.

“It can be argued that as the Philippines implements existing FTAs and concludes new agreements, products from Europe will be competitively disadvantaged as they enter the Philippine market,” Mr. Pascual said.

Meanwhile, Mr. Pascual said that the Philippines is also pushing for the renewal of the EU’s Generalised Scheme of Preferences Plus (GSP Plus) scheme.

“We at the DTI are dedicated to directly engaging the EU’s core institutions — the European Commission, European Council, and Members of the European Parliament — to ensure our GSP Plus status and to reapply in the next GSP scheme,” Mr. Pascual said.

“The Philippines has been the only ASEAN country to benefit from the EU-GSP Plus since 2014. Philippine exports to the EU rose from 5.3 billion euros in 2014 under the standard GSP to 7.8 billion euros in 2021. The current GSP scheme, set to expire in December 2023, benefits Philippine exporters and EU importers alike,” he added.

GSP Plus is structured as an incentive arrangement that grants the Philippines zero tariffs on 6,274 products or 66% of all EU tariff lines in exchange for complying with 27 international conventions on labor, human rights, governance, and the environment.

Some of the country’s top EU-GSP Plus exports include crude coconut oil, vacuum cleaners, prepared or preserved tuna, hairdressing equipment, and prepared or preserved pineapple.

The Philippines has been threatened with cancellation of GSP Plus privileges, most recently when the European Parliament in February 2022 approved a resolution urging the Duterte administration to address allegations of violence and human rights violations.

“Through the years, the Philippines has engaged the EU and completed four GSP Plus monitoring dialogue cycles that review the country’s compliance with the 27 conventions covered under GSP Plus,” Mr. Pascual said.

“Historically, the EU has been a significant trading partner of the Philippines and it is now ranked as the 4th largest trading partner of the country. The EU is also a major investment partner of the Philippines. Over the years, the EU has been one of the largest foreign investors to the Philippines, putting in over P102 billion or around 2 billion euros,” he added. — Revin Mikhael D. Ochave

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