EU Trade Commissioner Cecilia Malmström and Philippine Secretary of Trade and Industry Gregory Domingo today agreed to start negotiations for an EU-Philippines free trade agreement (FTA).
Both sides share the ambition to conclude an agreement that covers a broad range of issues, including elimination of 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.
'Launching negotiations with the Philippines will represent an important milestone in the EU-Philippine relations and a further evidence of the EU'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.'
The first round of negotiations is expected to take place in the first half of 2016 in the Philippines.
The Philippines is one of the 10 members of the Association of South East Asia (ASEAN), as well as the 5th largest economy in the region and the 2nd biggest market in ASEAN. It is also the 5th country of the ASEAN to start negotiations for a bilateral free trade agreement with the EU.
Taken as a whole, ASEAN 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 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 (2014) and Vietnam (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 Philippines amounted to €5.7 billion. This made the EU the Philippines' fourth largest trading partner. The EU exports to the Philippines mostly transport equipment (31%), machinery (15%), food products (13%), chemicals (11.5%), and electronic components (11%). Philippines' main exports to the EU are office and telecommunication equipment (45%), machinery (15%), food products (12.5%), and optical and photographic instruments (11%).
The 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.
The EU-Philippines relation is governed today by the Partnership and Cooperation Agreement signed in July 2012. The Philippines has also been benefitting since the end of 2014 from the enhanced trade preferences granted by the EU under the Generalised Scheme of Preferences (GSP)-plus since the end of 2014.