The European Union and the Philippines reached a “substantial” agreement overnight from Monday 21 to Tuesday 22 September on their future free trade agreement, more than two years after talks resumed.
On Tuesday, European Commissioner for Trade, Maroš Šefčovič, and the Philippines’ Secretary of Trade and Industry, Cristina Roque, welcomed this progress. The agreement will reportedly facilitate access for European exporters to a market of more than 113 million people.
The negotiations have not been formally concluded, but the two parties have reached a substantive agreement, ahead of a definitive conclusion “in the coming months”, the European Commission specified. It is a situation recalling that of Indonesia, when Commission President, Ursula von der Leyen, had announced a “political agreement” (see EUROPE 13680/7) before the formal conclusion of the negotiations. The President of the institution said she would travel to the Philippines in 2027 to sign the free trade agreement.
Asked what this ‘substantial agreement’ meant, Maroš Šefčovič replied that “the key parameters are in place and have been approved at political level”, and that all that now remains is “to transpose these figures and these key agreements into a legal text”. In the meantime, the Commission will inform the Member States and the European Parliament, while preparing the legal version of the text.
Most customs duties removed. “We have agreed to liberalise more than 94% of tariff lines covering more than 97% of goods on both sides”, Commissioner Šefčovič stressed at a press conference.
“This is very good news and a major opportunity for EU exporters, which already sell more than 8 billion (euros - Ed.) per year to the Philippines in the machinery, transport equipment, pharmaceutical and [agricultural] sectors”, he added. This agreement is also of strategic importance for certain value chains, such as semiconductor production, the Commissioner specified.
The news was welcomed by several European agricultural organisations, including Copa-Cogeca. For the European Association of Dairy Trade (Eucolait), the agreement “will further improve the dairy sector’s access to one of the region’s most dynamic markets”. The European ethanol industry (iEthanol) was more critical, considering the announcement “hasty and confusing”. It had already expressed reservations about this future agreement (see EUROPE 13840/27).
Towards a fast-track procedure? From the perspective of the Philippines, there is a “sense of urgency” to conclude the negotiations, according to Mr Šefčovič. It remains to be seen whether this text, once signed, will be the subject of a ‘fast-track procedure’, like the one concluded with India (see EUROPE 13936/11).
Manila currently benefits from the Generalised Scheme of Preferences, facilitating its exports through reduced customs duties. But its recent classification by the World Bank as an upper-middle-income economy could lead to a reduction in these preferences (see EUROPE 13930/4).
In this context, the Philippines therefore has an interest in speeding up talks with the EU. The duty-free coverage provided for by the free trade agreement would be significantly broader than the current advantages of the GSP, stressed the EU Ambassador to the Philippines, Massimo Santoro, according to the daily newspaper Manila Bulletin.
Strengthening ties with ASEAN. This agreement is part of the broader efforts deployed by the EU to deepen its trade relations with the nations of South-East Asia. The Union already has agreements with two ASEAN countries, Singapore and Vietnam, and is currently negotiating with other member countries.
On Tuesday, the European Liaison Committee for the Agricultural and Agri-food Trade (CELCAA) welcomed this new stage in the negotiations with the Philippines and called “for the conclusion of negotiations with the other ASEAN partners, Thailand and Malaysia”. Negotiations with Kuala Lumpur resumed on Monday 21 September and will continue until Friday.
As for the Philippines, once the negotiations have been formally concluded, the European Parliament will begin its approval procedure as soon as the Council has officially forwarded the agreement to it. (Original version in French by Juliette Verdes)