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Philippines willing to work on FTA negotiations with EU

Philstar Global - 31 October 2022

Philippines willing to work on FTA negotiations with EU
By Catherine Talavera

The Philippines has expressed interest and willingness to work toward the resumption of negotiations for a Free Trade Agreement (FTA) with the European Union (EU), according to the Department of Trade and Industry (DTI).

In a statement, the DTI said Trade Secretary Alfredo Pascual delivered a strong message of commitment to the EU-Philippine partnership in trade and investment before the EU Parliament Committee on International Trade on Oct. 27.

The DTI said Pascual made a presentation in the European Parliament in Brussels during the critical last month of the monitoring process for the renewal of the Philippines GSP+ preferential status.

“Manifesting willingness to work closely with the EU, Secretary Pascual highlighted EU-GSP+ support in improving bilateral relations and socio-economic development in the Philippines, as well as policies and programs of the new administration that reaffirms the country’s compliance with international conventions,” the DTI said.

The Generalized Scheme of Preferences Plus (GSP+) is an incentive arrangement that grants the Philippines zero tariffs on 6,274 products or 66 percent of all EU tariff lines. This preferential trade is maintained, while the country upholds its commitments under the GSP+ select 27 international conventions on human rights, labor, good governance, and environment.

“The Philippines is an attractive investment destination given its solid macroeconomic fundamentals, enabling policy environment, and young and trainable workforce. With a stable and predictable political regime, our country is well-positioned in the Indo-Pacific to become a regional hub for manufacturing, innovation, training, and education,” Pascual said.

The DTI pointed out that since the Philippines’ successful application to the GSP+ in 2014, the country has benefited from increased market access to the EU.

It cited data showing that Philippine exports to the EU climbed from €5.3 billion in 2014, under the standard GSP, to €7.77 billion in 2021.

In 2021, the Philippines recorded its highest utilization rate at 76 percent of total eligible exports, including tuna, processed fruits and spectacle lenses.

The DTI also emphasized that the GSP+ has benefited EU companies as well, as they invest in manufacturing facilities in the Philippines to take advantage of the country’s extensive and expanding domestic market, as well as its network of FTAs, which includes those with ASEAN. They have also gained from the relatively lower cost of raw materials.

Meanwhile, Pascual identified significant developments in the Philippine landscape – change in government leadership, transition to a preventive and rehabilitative anti-illegal drugs campaign, assurance of press freedom, and a vow to combat climate change, all of which indicate that the country is set on pursuing good governance and building back better.

“Given the foregoing and the values and principles we share, the Philippines remains interested and therefore ready to work toward the resumption of negotiations of the Philippine-EU Free Trade Agreement,” Pascual said.

“A 2020 study shows that 83 percent of German companies want to resume the FTA negotiations, citing huge potential for EU companies, with the FTA positively affecting competitiveness,” he said.

Apart from his presentation before the EU Parliament Committee on International Trade, Pascual also participated in a panel session of the EU’s Sustainable Investment Summit, where he acknowledged the critical role that innovation and research and development (R&D) plays in terms of policy implementation.

“We have seen other situations in the past wherein regulations ended up in a back-sticking exercise to measure compliance but actually, what we need to see is performance. For performance to happen, we need to inject innovation that will drive performance toward greater heights. Regulations are important but it should not stop there. We need to go from compliance to performance, and that’s where R&D comes in,” Pascual said.

 source: Philstar Global