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EU, PH will establish free trade agreements before end of Marcos admin

Manila Standard - 29 June 2024

EU, PH will establish free trade agreements before end of Marcos admin
By Rachelle Tonelada

The European Union (EU) and the Philippines are eyeing to establish the EU-PH Free Trade Agreement (FTA) before the Marcos administration ends, Chris Humphrey, Executive Director of EU-ASEAN Business Council, said.

Humphrey, in an exclusive interview with the Manila Standard, also said Europe’s economic relation with the Southeast Asia region is at its strongest and its highest level of involvement.

The official also said, “Engagements have been more robust, accompanied by a significant increase in trade agreements.”

“I can tell you we are very encouraged by President Marcos’ administration, particularly the economic team, and we are keen supporters of making progress on the EU-Philippines FTA negotiations as well,” Humphrey said.

Humphrey discussed the status of the formal negotiations for the PH-EU FTA, which will resume in the third quarter of 2024. He said that the level of ambition on both sides is in a great position after the stocktaking exercises made in March 2024.

Humphrey is optimistic that the PH-EU economic relations in the next five years will be in “better directions.” Once the EU-PH FTA is signed, he said preferential tariff rates on both sides will take place which will facilitate greater investments.

“Agreement will mean preferential tariff rates. It would also mean the removal of non-tariff barriers as well on both sides, and that is something that the industry would always welcome, which hopefully would lead to a closer alignment on standards. Again, that makes life easier for businesses on both sides,” he said.

“It would also mean more openness in terms of government procurement issues. On the services side, an opening up of services issues on both sides as well, and that will clearly help in both directions. So overall, once it’s agreed and then implemented, life will get much easier,” he added.

The agreement could simplify processes and enhance cooperation between the EU and the Philippines, especially in the agriculture and fisheries sectors. Energy transition initiatives and digital technology transfers are also in the pipeline as Humphrey noted the potential for various green initiatives.

“For the EU companies going to the Philippines, there’s huge scope to work with the government and with Philippine companies in areas like energy transition and digital technology transfers as well. A whole host of green initiatives, in fact, could help. I think if the services side is opened up, you’ll find access to European finance a bit easier as well,” he explained.

“And that I think also is particularly true in the energy transition sector, so offshore wind farms, solar farms, geothermal technology as well. Europe has a lot of firms that work in that space. They have world-leading technological expertise… that can work well for the Philippine people,” he assessed.

When asked regarding the impact of the EU Deforestation Regulation (EUDR) and the Corporate Sustainability Due Diligence Directive (CSDDD) on the discussions of EU-PH Free Trade Agreement (FTA), Humphrey stated that “these regulations were not raised as major concerns.”

He noted that the Philippines appears more relaxed about these issues because the country does not heavily rely on products linked to significant deforestation for its exports to the EU. Humphrey pointed out that the Philippines’ agricultural sector, particularly in areas like cacao and coconut production, “is already mature and thus less susceptible to stringent environmental regulations.”

“The Marcos administration has made it very clear they want to move ahead, they want to move ahead pretty fast, and I think they see Europe as a block which can help them do that as well,” he said.

 source: Manila Standard