The country’s finance chief has called for the resumption of the Philippines and European Union’s negotiations on a free trade agreement (FTA).
“Now is the time for us to resume the Philippines-European Union FTA negotiations,” Finance Secretary Benjamin Diokno said in his video message during the European-Philippine Business Dialogue held in Makati yesterday.
“As the Philippines’ major trade and investment partner, resuming the FTA negotiation with the EU will be a vital component of the Philippine trade policy agenda,” he added.
Diokno said since the successful application of the Philippines to the Generalized System of Preference (GSP) Plus in 2014, the Philippines has enjoyed greater market access to the EU that led to a significant increase in exports.
“In 2021, total exports to the EU amounted to 7.8 billion euros, with GSP Plus utilization growing into an all-time high of 76 percent that same year,” Diokno said.
He also noted a strong call from the European business sector in the Philippines to resume FTA negotiations.
“These companies recognize the huge potential for EU companies, with the FTA positively affecting competitiveness,” Diokno said.
“A bilateral FTA with the Philippines is also consistent with the EU’s Indo-Pacific strategy. The Philippines can support the EU’s goal to diversify suppliers and enhance its cooperation in supply chains in the Asean region,” he added.
Diokno said the FTA will be an ideal platform to optimize the benefits of the large EU market and a permanent mechanism to fuel economic relations.
Earlier, Chris Humphrey, executive director of the EU-Asean Business Council , in a press conference, echoed the opinion of the European Chamber of Commerce of the Philippines (ECCP) in advocating ease of doing business in the country, saying there is a lot more progress that can be done in cutting bureaucracy and in transparency on government procurement and other areas.
According to Humphrey, businesses in Europe are pushing for the FTA and not just for the renewal of the Generalized System of Preference (GSP) plus.
Although potential concerns about human rights and investment environment in the Philippines have been raised, Humphrey said politically, the Philippines has increased its relevance dramatically with the Marcos administration’s accommodating and engaging foreign policies.
“That is also a factor that will gravitate (towards) getting the FTA,” he said.
Humphrey noted the importance of having the FTA in place since the Philippines “will lose GSP plus at some point.”
“But you need to lose it for the right reason and the right reason is your continued economic development. The important thing then is to make sure that the FTA is in place when that happens, so you can continue as you trade better and smarter with Europe,” he said.
Humphrey is accompanying 70 representatives from 36 companies in Europe currently in the Philippines to explore business interests in finance and insurance, manufacturing, automotive, electronics, digital economy among others.
