Diokno calls for resumption of PH-EU FTA negotiations

The Department of Finance (DOF) has thrown its support behind President Marcos’ push to resume the Philippines-European Union Free Trade Agreement (FTA) negotiations.

Finance Secretary Benjamin E. Diokno said that it is “his desire” to resume the FTA negotiations between Manila and the EU, particularly with the government’s recent structural reforms, such as Regional Comprehensive Economic Partnership (RCEP).

RCEP is the world’s largest trade agreement to improve market access and promote inclusive regional economic policies.

“Geo-economic fragmentation and trade protectionism will only burden an already struggling global economy. That said, now is the time for us to resume the Philippines-European Union Free Trade Agreement negotiations,” Diokno said.

On Thursday, President Marcos said the Philippines and the EU should solidify their long-standing and historically beneficial trade relations through a bilateral FTA.

“It promises to achieve mutually beneficial economic goals while maintaining consistency with the EU’s core ideals of sustainable development and environment protection, as well as with EU’s Indo-Pacific strategy,” Marcos said.

The exploratory FTA scoping meetings between Manila and the EU started in 2013. It included discussions on the objectives, key principles, and scope of the FTA negotiations that were concluded during a meeting between trade ministers in Brussels in October 2015.

The launch of the FTA negotiations was subsequently announced by both sides three months later. The first round of negotiations was held in May in Brussels, Belgium, while the second round of negotiations was held in February 2017 in Cebu.

But even without the FTA, the Philippines has been enjoying greater market access to the EU which led to a significant increase in exports since its successful application to the Generalized Scheme of Preferences-Plus (GSP+) in 2014.

The EU GSP+ removes import duties from products coming into the EU market from vulnerable developing countries. It is a special incentive arrangement for sustainable development and good governance.

In 2021, total exports to the EU amounted to 7.8 billion euro, with GSP+ utilization growing to an all-time high of 76 percent that same year.

“The FTA will be an ideal platform to optimize the benefits of the large EU market and a permanent mechanism to fuel our economic relations,” Diokno said. — Chino S. Leyco