The Philippines hopes to fast track the conclusion of negotiations for a free trade agreement (FTA) with the European Union (EU) by a year or in 2026, according to Allan Gepty, undersecretary of the Department of Trade and Industry (DTI).
President Marcos Jr. earlier said he wanted to conclude the FTA talks by 2027 and get it implemented before his term ends in 2028.
Gepty said the Philippines will push for the inclusion of “substantially all” products covered by the Generalized System of Preference Plus (GSP+) and the remaining tariff lines not enjoying the scheme.
“We are targeting 2026 if that is possible. We will exert all efforts,” Gepty said, noting EU is major source of investments.
“If we have an FTA with EU, definitely investments will increase. The fact that we are (negotiating for an) FTA sends a positive signal. We hope to sustain that momentum,” Gepty said.
The Philippines also hopes to tackle in the second round of negotiations in February the market access provision of the FTA but Gepty said both parties hope to conclude as many provisions as possible to meet the target.
The third round is set in June and the fourth in October 2025.
“We want to finish this as soon as possible for so many reasons. This is a very important FTA, it’s very comprehensive. EU is a major trading partner, and there’s still a lot of untapped export potential in the EU market,” said Gepty who earlier said a study showed the FTA will boost Philippine exports to EU by $8.3 billion.
The FTA will open opportunities in other areas like services and investments.
Gepty also noted the importance of accelerating the negotiations as exporters can potentially lose GSP+ privileges once the Philippines attains upper middle income status.
A country in this status for three consecutive years, will no longer qualify as a beneficiary of the GSP+.
“There’s pressure on us to conclude the negotiations as soon as possible because we don’t have a gap in our trade with the EU as far as enjoying preferential arrangement is concerned,” Gepty said.
He said once stripped of GSP+ privileges, exporters will lose their competitive advantage.
In the case of tuna alone, the tariff could revert back to up to 26 percent.
“We have not reached the upper middle-income status but we are experiencing high economic growth of 5.6, sometimes 6 percent. We’re looking at that trajectory and
assumptions, we have to be prepared,” Gepty said.
He said the Philippines will push for the inclusion of all the products under the GSP+ covering 11,000 tariff lines and if possible, the remaining ones.
Products under GSP+ only account for 26 to 28 percent of Philippines’ total exports to the EU.
Gepty said under GSP+, the Philippines also hopes to improve the rules of origin to qualify more exporters, including those in garments and textile which is a GSP+ beneficiary.
In agriculture, the Philippines is hitting a high utilization rate of 90 percent of the GSP+.
“But we have difficulty complying with the rules of origin on garments where the GSP+ utilization is only 40 plus percent. So there is still a lot of opportunities,” Gepty added.
Gepty said the Philippines has requested for a derogation — or exemption — to the rules of origin on garments.
“We also want to secure the preferential arrangement of the tuna industry and other agricultural products like pineapples, coconuts“Gepty said.
