By JOCELYN MONTEMAYOR and IRMA ISIP
The Philippines and the European Union (EU) agreed to relaunch their negotiations for a bilateral free trade agreement (FTA) in their shared belief the timing and the conditions are just right to solidify their trade relations.
President Ferdinand Marcos Jr. and EU Commission President Ursula von der Leyen tackled this during a bilateral meeting yesterday in line with the latter’s visit to the Philippines.
Marcos, during their joint briefing, said EU also agreed to give the Philippines a grant worth 60 million euros from the EU Global Gateway to finance the country’s Green Economy Program (GEP).
In her speech at an event hosted by the European Chamber of Commerce of the Philippines and the Makati Business Club, Von der Leyen said the EU will prolong the Generalized System of Preferences (GSP) Plus where the Philippines is a beneficiary but that “there’s much more untapped potential in our trade relationship.”
“And let me give you an example. A few months ago, I was in South Korea where (I) saw the impressive positive impact of a trade deal we’ve just concluded. In a little over a decade, the EU trade with Korea has more than doubled. This is what happens when you give people and businesses the opportunity to work across borders, new doors open for innovation, and most importantly, people benefit. So let’s make progress. Our trade agreements with Singapore and Vietnam are already delivering and you’re once to conclude more free trade agreement with other Asean countries. I believe like President Marcos that the timing and the conditions are just right for us now to solidify our bilateral trade relations and that is why we’re have taken the decision to relaunch our negotiations for a free trade agreement between the Philippines and the European Union,” she said at the business groups’ event.
At the joint briefing, Von der Leyen said: “Our teams will get to work right now on setting the right conditions so that we can get back to the negotiations. A free trade agreement has huge potential for both of us in terms of growth and in terms of jobs,” she said, adding that the recent developments in the world have taught everyone about the cost of economic dependencies.
“We need to diversify our supply lines and make them resilient.
This is a lesson we have learned and that is what we call “de-risking” our trade relations.
An FTA is the basis for that. But it’s also much more. An FTA can be a springboard for a new technology cooperation to modernize the broader economy,” she added.
Scoping
In a statement, the EC said the EU and the Philippines will shortly kick off a bilateral scoping process to assess to which extent they share a mutual understanding on the future FTA. If this process concludes successfully, and after consultations with the member-states, the EU and the Philippines would be in a position to resume FTA negotiations.
The EU aims for a comprehensive FTA with the Philippines that includes ambitious market access commitments, swift and effective sanitary and phyto-sanitary procedures, as well as the protection of intellectual property rights, including Geographical Indications.
Sustainability will also be at the heart of this agreement, with robust and enforceable disciplines on Trade and Sustainable Development (TSD) . These will be in line with the Commission’s TSD review Communication of June 2022, supporting high levels of protection for workers’ rights, for the environment, and the achievement of ambitious climate goals.
In a statement, Trade Secretary Alfredo Pascual said with the country’s positive trajectory towards reaching upper-middle income status, it is indeed high time for the Philippines and the EU to resume FTA negotiations.
Pascual said the Department of Trade and Industry along with its inter-agency negotiating team will closely work with counterparts from the EC to ensure the success of the scoping exercise this year.
“To maintain strong economic relations with the EU, it is important that we solidify our economic relations through the PH-EU FTA before the Philippines eventually loses its GSP+ status due to our continued economic growth,” Pascual said.
Meanwhile, the 60 million euros from the EU Global Gateway would support the Philippines in areas such as circular economy, renewable energy, and climate change mitigation.
The EU Global Gateway is the region’s investment plan for the world for sustainable infrastructure where EU member states pooled half a billion euros in the initiative.
A Joint Declaration on the Green Economy Programme in the Philippines (GEPP) was signed by EU Ambassador Luc Veron, head of the delegation of the European Union to the Philippines, and Environment and Natural Resources Secretary Maria Antonio Yulo-Loyzaga in the presence of Marcos and Von der Leyen.
Green economy
Under the GEPP, the two sides have agreed to sustain green infrastructure development, trade, investments, including private sector engagement in green and sustainability measures in urban areas and micro, small and medium enterprises in the country; sustain technical education and skills development to enhance human capital and build a skilled “green” workforce capable of driving sustainable development in the Philippines; and share information on best practices and innovations towards improving resource use efficiency, minimizing waste generation, and scaling up renewable energy and energy efficiency, among others.
The joint declaration added there should be “investments in climate change adaptation, mitigation and environmental protection measures, including development and transfer of green technologies and innovations,” among other relevant cooperation areas which may be later agreed upon.
The Joint Declaration is also “not meant to constitute and international treaty nor create any rights and obligations under international law.”
Both sides, however, may regularly exchange opinions on the realization of the intent of this Joint Declaration, and work towards the completion of their respective approval and other processes, in accordance with existing laws, rules and regulations… (and) any dispute in the Joint Declaration will be settled amicably through consultations.”
Eyes in the sky
Von der Leyen said the EU will also be supporting the Philippines’ fight against climate change and extreme weather events through its “Eyes in the sky,” or the use of the Copernicus satellites.
She said that through a Philippine-EU agreement aimed at sharing and boosting the flow of Earth observation data, the European group set up a “Copernicus data mirror site” within the Philippine space agency which would be used for the early warning for extreme weather phenomena and to improve the climate resilience.
She said this is “first in-space cooperation in Asia”
Digital hub
Marcos and Von der Leyen also talked about the efforts of the Philippines to become a digital hub in the region.
She said the Global Gateway program would play a crucial role in the program as many European companies are ready to come and invest in the Philippines.
She said to assist the Philippines, it would launch within the year a digital economy package for the Philippines which would include setting up “fast and reliable connectivity” through submarine cables; providing cybersecurity training; and deployment and development of 5G.
“We are also working on a possible extension on a submarine cable that we plan to build between the European via the Arctic to Japan. And this cable could go all the way down to Southeast Asia. And we believe that it could go via the Philippines that would give you a strategic position on an infrastructure that could be instrumental both for your prosperity and national security. We will stay in close contact on this,” she said.
Marcos and Von der Leyen also talked about critical raw materials wherein the Europeans “do not only invest in extraction, but across the whole value chain. We share technology and knowledge. We train the local workforce and we empower local communities and of course, we abide by the highest and environmental standards.”
Marcos acknowledged the EU extension of the recognition of the Standards of Training, Certification and watchkeeping for Seafarers certificates issued by the Philippines as it affected the employment of more than 50,000 seafarers working onboard EU flag vessels.
He also extended his gratitude forV der Leyen’s visit, the first for an EU President, which comes at the eve of the celebration of the 60th anniversary of Philippines-EU diplomatic relations.
Von der Leyen, who arrived Sunday for her three-day official visit.
