The European Union (EU) is aiming to secure a free trade agreement (FTA) with the Philippines by the end of 2027, or before the expiration of a special incentive system that provides the country duty-free access for over 6,200 products to the 27-member bloc.

EU Ambassador to the Philippines Massimo Santoro said he is optimistic that, at the current pace of negotiations, the FTA could enter into force before December 2027.

If there is no extension, the Philippines’ utilization of the Generalized Scheme of Preferences Plus (GSP+) arrangement would expire in December 2027.

Under GSP+, the country benefits from having zero tariffs on the export of 6,274 products to the EU. This is exchange of upholding international conventions on human rights, labor rights, environmental protection and climate change, and good governance.

Santoro said the Philippines’ utilization of the GSP+ reached an all-time high of 80 percent.

“Already, [GSP+] is a very powerful tool. Still, FTA would be even more powerful and would be, of course, applicable for both sides,” Santoro said on the sidelines of the 2025 European-Philippine Business Dialogue.

“So, this is why we are very much hopeful that we can be fast in these negotiations, securing good results for both sides,” he added.

After restarting talks in October last year, the EU and the Philippines have now completed three rounds of FTA negotiations.

Santoro said the fourth round is scheduled next week. Instead of Manila, he said the meetings will now be held in Cebu to show solidarity with the victims of the recent earthquake.

Under the first three rounds, both parties have engaged in discussions across key areas in a bilateral trade relationship, including customs and trade facilitation, technical barriers to trade, and intellectual property, among others.

During the most recent talks held in Belgium last June, negotiations included government procurement, digital trade, energy and raw materials, as well as trade and sustainable development.

Without elaborating, Santoro said both sides have already closed several chapters in the agreement, while others are in advanced stages. In the fourth round, he said the focus would be on “more important substance.”

The envoy said it is not yet determined how many more rounds will follow, but he noted that fewer rounds would hinge on both sides’ willingness to accelerate negotiations.

However, in his view, there appears to be a concerted effort to expedite talks due to ongoing uncertainties in global trade, driven by the protectionist policies of the United States (US).

Santoro said both the EU and the Philippines are looking to broaden market access to cushion the impact of the US’ reciprocal tariffs on their respective domestic industries.

“We wish to negotiate well to have the possibility of having full access to the market for European business to the Philippines and vice versa, exactly in order to ensure that both the Philippine and European Union investors have the possibility to bring their own business, goods, services to each side,” the official said.

Last year, Philippine exports to the EU amounted to $8.1 billion, while imports from the EU reached $7.5 billion. Total trade between both parties stood at $15.5 billion.

Apart from the FTA, Santoro said the EU is also in talks with the Philippine government to implement laws that would further attract foreign investors.

He said one of the key measures that showed the country’s readiness to accept investors was the passage of the Corporate Recovery and Tax Incentives for Enterprises to Maximize Opportunities for Reinvigorating the Economy (CREATE MORE) Act.

In relation to this, Santoro said investors are monitoring the ongoing corruption scandals involving flood control. However, he said this has not yet eroded their confidence in the Philippines, given the government’s ongoing investigations and transparency efforts.

“For any investor, what is important is the attention and the reaction of the authorities whenever cases like the current ones appear. So far, my impression is that the response has been good, has been strong, has been clear,” he said.