The Philippines and the European Union (EU) announced the resumption of negotiations for a free trade agreement (FTA). 

Philippines Trade and Industry (DTI) Secretary Fred Pascual and European Commission Executive Vice President and Trade Commissioner Valdis Dombrovskis made the announcement in a press briefing Monday evening, March 18 (Philippine time), in Brussels, Belgium. 

"The conditions are right to take our trade relations to the next level. Trade between EU and the Philippines is already strong and has been growing at an impressive pace over the last decade. But we can do more to realize the full potential of our trade relationship," said Dombrovskis.

"After concluding an extensive joint stock-taking exercise at the end of the last year, we assure our commitment to strive for a state-of-the-art agreement with sustainability at its core," he added.

The renewed talks came after the positive engagement between the Philippine government and EC President Ursula von der Leyen last July 2023, where the possibility of relaunching FTA negotiations was discussed.

Dombrovskis welcomed the "positive change in direction" of the current Marcos administration, which has opened the opportunity for dialogue between the two parties.

Pascual meanwhile noted that "to the vibrant Southeast Asian region, the Philippines stands as a crucial ally of the EU, and we're ready to engage in meaningful economic reforms to make this happen." 

Dombrovskis said that the Philippines has the potential to be a beneficial market for the EU, with the EU as the Philippines' fourth largest trading partner and one of its highest investor partners. Trade of goods grossed over 18.4 billion euros in 2022, while trade of services grossed 4.7 billion euros in 2021.

The FTA is projected to increase trade by up to six billion euros, he added.

"An FTA with the EU is  anticipated to expand market access in goods, services, and investments significantly. It aims to enhance commercial interactions between our business sectors, create valuable opportunities for our service providers, especially our professionals, and establish reciprocal rules and standards," said Pascual.

He noted that the stock taking exercise helped identify the lingering issues and set a constructive tone for the discussions going forward.

"We are committed to effectively implementing the  international conventions under our current GSP coverage and believe that incorporating a meaningful trade and sustainable development chapter into our FTA is essential to our sustainable development objectives," said the trade chief.

Back in 2015, the EU and Philippines first launched negotiations for the FTA, with the final round of talks in 2017. However, no further rounds were scheduled due to the EU's concerns regarding local policies on intellectual property (IP) among others. 

In 2023, the EU emerged as the country’s 5th largest trading partner with total trade amounting to $16.16 billion (8.1% share to PH total trade), the 6th export market with $8.37 billion, and the 6th import supplier valued at $7.79 billion. Similarly, the EU has been a major foreign investment partner, with total foreign direct investments reaching $29.16 million in 2022 and $63.99 billion in 2023.

A comprehensive stocktaking exercise conducted by the Department and the European Commission, from September to December 2023 laid the groundwork for the resumption of the negotiations. The exercise aimed to understand respective ambitions and explore possible elements of the FTA, acknowledging the evolving global economic landscape since the first two negotiating rounds in 2016 and 2017.