The European Chamber of Commerce of the Philippines (ECCP) is pushing the government to accelerate negotiations for a free trade agreement (FTA) with the European Union (EU) as it warns of “severe” impact on its key exports if no deal is reached by the end of 2027.

In its 2025 Advocacy Papers, the ECCP said there is a clear urgency to finalize the FTA with the scheduled expiration of the Philippines’ utilization of the EU’s Generalized Scheme of Preferences Plus (GSP+) in December 2027.

“Concluding the agreement on time would safeguard the benefits of GSP+ while amplifying them through expanded trade, new investments, and stronger integration into global supply chains,” the report read.

“Delay, by contrast, would risk billions in exports and squander a unique opportunity,” it added.

The Philippines is one of only eight countries that are benefitting from the GSP+ arrangement, which allows it to export 6,274 products to the EU without any tariffs.

In exchange, the country must uphold international conventions on human rights, labor rights, environmental protection and climate change, and good governance.

In 2024, the GSP+ allowed approximately $2.57 billion worth of Philippine exports to enter the EU, covering more than a quarter of the country’s total exports.

The utilization rate last year reached 80 percent, the highest on record. The top beneficiaries of the scheme are coconut oil, tuna, and pineapples, according to the ECCP.

“Without a new trade framework, these benefits could vanish and exporters would face higher tariffs under WTO rules,” the report read.

If there is no FTA in place, the ECCP said local exporters will lose preferential access to the EU’s 450-million-strong consumer market.

It would likewise reduce competitiveness among key sectors such as agri-food, garments, and tuna with the advent of tariff increases.

“The case for an EU-PH FTA has never been clearer. It is not only a bridge from a temporary preference scheme to a permanent partnership but also a catalyst for growth, competitiveness, and sustainability,” the ECCP said.

The chamber noted that, unlike the GSP+, which is temporary and dependent on compliance for continued eligibility, the FTA offers a more permanent and reciprocal framework that provides predictability for both businesses and governments.

Citing a study by the International Trade Center (ITC)., the ECCP expects the FTA to unlock $8.3 billion in untapped Philippine export potential to the EU.

The ECCP also expects the FTA to boost the EU’s foreign direct investment (FDI) in the Philippines, which only stood at €14.2 billion in 2023 or just around four percent of the bloc’s total investments in Southeast Asia.

“A strong FTA, with clearer rules and stronger investor protections, could help attract higher-quality European investment into Philippine manufacturing, infrastructure, energy, and services,” it said.

As a bilateral foreign chamber that promotes European interests in the Philippines and vice versa, the ECCP said European businesses are also pushing for more urgent FTA negotiations.

In its 2024 Business Sentiment Survey of nearly 200 firms, 85 percent of respondents said that the entry into force of the FTA is of significant importance for their business strategies.

“This widespread support indicates that businesses see the FTA as the primary means to enhance market access, lower trade barriers, and significantly improve the overall business climate,” the report read.

EU Ambassador to the Philippines Massimo Santoro said last week that he is optimistic that the FTA could enter into force before the expiration of the GSP+ by the end of 2027, given the current pace of negotiations.

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

The fourth round is set to begin this week in Cebu, held in solidarity with those affected by the recent earthquake.

For the part of the EU, the ECCP said securing an FTA with the Philippines would ensure its 27 member states another market to ensure the resiliency of their supply chains.

The chamber said the EU can also take advantage of the country’s fast-growing economy, supported by a population of over 112 million.

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.

Philippine exports to the EU were led by electronics, followed by coconut oil, machinery, and preserved tuna. On the import side, the Philippines sourced aircraft, machinery, pharmaceuticals, pork, and dairy products from Europe.