The European Union (EU) hinted that compliance with the conventions set under its Generalized System of Preferences+ (GSP+) will be a strong determinant to the successful outcome of the proposed bilateral free trade agreement (FTA) between the two countries.

This was raised by Luc Véron, ambassador of the EU Delegation in Manila, during the 2022 European-Philippines Business Dialogue on Monday, Nov. 14.

While both parties are interested in pursuing the FTA, the ambassador also noted that “We (EU) feel that not all elements are in place yet.”

Veron said this after stating that the European Commission is starting a reflection as to whether the “conditions are right” to resume one of the negotiations in the South East Asia, whether it could be Thailand, Malaysia, or the Philippines. The FTA has been posed in the last few years but no decision has been made yet.

In the case of the Philippines, the ambassador observed that compliance with the GSP+ remains a fundamental element of the EU Commission reflection.

“We look forward to further movement by the Philippines implementing its commitment on the GSP plus conventions. Clear step will make it easier for the EU and the Philippines to further assess the prospect of a resumption of the negotiation (of an FTA) and more importantly the perspective of a successful outcome of such talks,” the ambassador said.

According to Veron, the successful implementation of the GSP+, with this implication for human and labor rights, good governance and environmental protection is currently the first priority in the EU- Philippine trade policy relations.

Earlier, Trade and Industry Assistant Secretary Allan B. Gepty said that of the six proposed additional conventions, only the Labor Inspection that the Philippines has yet to ratify.

“We are already working on the ratification process,” Gepty said noting that “Philippines is a strong advocate of labor rights and welfare, thus, working on this accession will further strengthen our regime for the protection of workers.”

At present, the Philippines is enjoying the benefit of EU GSP plus trade preferences wherein more than 6,000 products in terms of tariff lines enter to the EU market at zero tariffs.

The GSP plus utilization rates of the Philippines in 2021 was around 76 percent with agricultural and fishery products as well as manufactured goods highly benefit from GSP plus.

As the Philippines has finally reopened after the pandemic, Veron said that “now” is an “opportune time to implement reforms and policies that will lead the country towards a resilient and sustainable future.

He cited steady growth in the bilateral trading goods between the US and the Philippines over the last few years.

In 2019, before the COVID outbreak, total bilateral trade reach 15 billion euros. EU-Philippine trade slumped during the pandemic but expressed the 2022 would be able to overtake pre pandemic levels.

That being said, Veron said that the EU-Philippines trade remains substantially below its potential. It is actually far lower than trade with all the major ASEAN members. For instance, he said, EU-Vietnam and EU Thailand trade outpaced EU Philippine trade by two to three times.