EDITORIAL - Ready for free trade?

After a decade of on-and-off negotiations, the Philippines and the European Union were glad to announce on Tuesday that a “substantial agreement” had been reached for a landmark free trade deal that would be formally signed by next year.

The free trade agreement is seen to scrap more than 94 percent of tariffs covering over 97 percent of trade between the Philippines and the 27-member European grouping.

Among the goods covered are agrifood products, machinery and industrial equipment, with micro, small and medium enterprises, farmers and manufacturers seen to benefit from predictable market access and cushioning against global tariff swings.

There will also be rules protecting and promoting investments, intellectual property and government procurement. The country and the EU will also pursue common clean energy objectives and digital trade frameworks.

Philippine exporters already enjoy preferential access to the EU market of over 400 million consumers through the Generalized Scheme of Preferences Plus. GSP+ grants zero tariffs on about two-thirds of EU product categories. An FTA broadens the preferential access while at the same time welcoming the entry of EU products and services.

Issues on human rights, environmental protection and good governance were among the factors that stalled the FTA negotiations. The regular perorations of Rodrigo Duterte against the EU along with the dismal human rights situation during his six years in power did not help.

Once the agreement is in place, the government must ensure that the country is ready to take full advantage of the FTA. Support must be given to domestic industries and MSMEs to ensure that they are ready for the challenges of free trade with the developed European economies.

Domestic enterprises must be ready for competition, while the environment must be welcoming for the entry of European goods and services.

After the long period of negotiations, the country must make sure that all the opportunities opened up by free trade with the EU won’t be wasted and the benefits are maximized.