Marcos hopes for Philippines-EU FTA by 2027

MANILA, Philippines — President Marcos is hoping to conclude negotiations for a free trade agreement (FTA) between the Philippines and the European Union by 2027 that is seen to further boost trade and investments between the country and the EU.

“We see the FTA as a crucial step in enhancing the trade partnership between the Philippines and the EU,” President Marcos said in his message delivered by Executive Secretary Lucas Bersamin during the 2024 European-Philippines Business Dialogue and European Investors’ Night in Makati City on Monday.

“We look forward to negotiations being finalized by 2027 and to elevating trade and investment flows through a comprehensive agreement that includes advanced provisions for digital trade and intellectual property rights,” Marcos said.

The Philippines and the EU are looking to resume formal negotiations for an FTA in the early part of the second half of the year, the Department of Trade and Industry earlier said.

The negotiations for the Philippines-EU FTA started in 2015. Talks were put on hold after the last negotiating round in 2017, amid the EU’s concerns on human rights issues as the previous administration waged its war against illegal drugs.

Marcos is optimistic the trade pact will unlock new opportunities, significantly increasing market access for Philippine goods and services and at the same time, facilitate the flow of investments, technology and expertise, bringing mutual benefits to both sides.

He said the FTA is more than just an agreement but a symbol of the Philippines and the EU’s shared vision for a future of prosperity and collaboration.

Marcos said the FTA is projected to increase trade between the Philippines and EU to six billion euros.

To maximize the benefits of the FTA, the President said the government has enacted significant reforms enhancing the business environment, such as the Retail Trade Liberalization Act, Foreign Investment Act and Public Services Act.

He also cited the Green Lanes Initiative for Strategic Investments aimed at streamlining the process of investment approvals for strategic projects.

According to Marcos, the FTA will also help secure the gains achieved through the EU’s Generalized Scheme of Preferences Plus (GSP+), which has already spurred export growth through preferential tariffs. The GSP+ arrangement will expire in 2027.

Marcos said the GSP+ arrangement has significantly benefited the Philippines, including tuna fishers, banana, cacao and pineapple farmers, with a utilization rate of 77 percent in 2022.

The Philippines currently enjoys trade preferences under the EU’s GSP+, a special incentive arrangement for sustainable development and good governance which grants duty-free access to the EU market for two-thirds of tariff lines.

As the Philippines is likely to reach the threshold of upper middle-income status by 2025, the country would no longer be qualified as a beneficiary of the GSP+.