PHL, EU officials discuss future of GSP+, possible free trade pact

Signaling the continuing strong ties between the Philippines and the European Union (EU), Department of Trade and Industry (DTI) Secretary Ramon Lopez met with his new counterpart, Executive Vice President Valdis Dombrovskis of the European Commission, to discuss the future of the Generalised Scheme of Preferences Plus (GSP+), a possible Free Trade Agreement (FTA), and other trade and investment relations on Tuesday, 08 December 2020.

“Our meeting today is indicative of the country’s continuing strong ties with the EU, and we hope to push for deeper trade and investment engagements by maximizing the benefits from the GSP+ and through a possible FTA with them,” said Sec. Lopez.

On the other hand, EU EVP Dombrovskis welcomed the constructive first exchange with the Philippine trade chief, noting that he looked forward to the continued cooperation in terms of trade and investment of the two parties.

The meeting discussed developments at the bilateral, regional, and multilateral levels with both officials highlighting the importance of GSP+ and its benefits for the Philippines.

DTI reiterated the importance of GSP+ to the country’s Micro, Small, and Medium Enterprises (MSMEs) as well as small communities, in the wake of the economic challenges posed by the COVID-19 pandemic.

Noting that GSP+ is hinged on the implementation of the 27 international core conventions, DTI conveyed that the Philippines stands ready to engage the EU in constructive dialogue with the conduct of a technical mission early next year.

Both officials likewise expressed anticipation with the convening of the Sub-Committee of Trade, Investment and Economic Cooperation under the PH-EU Partnership Cooperation Agreement (PCA) next year. Under the sub-committee, both sides are expected to discuss the negotiations for a bilateral FTA between the Philippines and the EU.

In a survey conducted by the German-Philippine Chamber of Commerce and Industry (GPCCI) this year, 83% of German businesses support the continuation of the FTA negotiations. Other topics that may be discussed in the sub-committee meeting include trade and investment cooperation, Industry 4.0, support for MSMEs, and intellectual property rights enforcement and protection, among others.

“There is a strong call from the business sector to continue the PH-EU FTA negotiations. There is a big opportunity for EU businesses to expand here in the Philippines—not just to access our huge domestic market, but equally important is to use the Philippines as a base for export manufacturing to access the RCEP market,” Sec. Lopez said.

Aside from the Partnership and Cooperation Agreement (PCA) between the European Union and the Philippines, EVP Dombrovskis also highlighted the establishment of the EU-ASEAN Strategic Partnership on 01 December 2020.

The landmark EU-PH PCA entered into force in March 2018, strengthening ties in political, social, and economic matters. Meanwhile, the EU-ASEAN Strategic Partnership elevates the ties of the two blocs, based on shared values and principles such as rules-based international order, effective and sustainable multilateralism, and free and fair trade, with a commitment to regular summits at leaders’ levels.

Meanwhile, the Trade Secretary shared that with the signing of the Regional Comprehensive Economic Partnership (RCEP) agreement, the Philippines is now setting its sights on the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP).

Furthermore, the officials exchanged views on the preparations for the 12th Ministerial Conference of the World Trade Organization (WTO), ongoing negotiations on fisheries subsidies, and discussions on e-commerce, investment facilitation, and services domestic regulations.

In 2019, the EU was the Philippines 4th largest trading partner with a total trade of EUR15.7 billion. The Philippines is the only ASEAN member state that benefits from GSP+.