EU pursues FTA talks with Philippines

By Louella D. Desiderio, The Philippine Star

Posted at Mar 30 2015 07:42 AM | Updated as of Mar 30 2015 03:42 PM

MANILA - The European Union (EU) is pursuing discussions with the Philippines within the year for a possible free trade agreement (FTA) as the country’s ongoing economic reform process shows readiness to commit to an ambitious bilateral deal.

“We hope this year, we can see more of the meetings we had last year and at least we can conclude the scoping phase (for the FTA) but we are not there yet,” Walter van Hattum, head of economic and trade section of the EU Delegation in Manila told reporters.

The last meeting for scoping discussions for an EU-Philippines FTA was held in November last year when the Philippine delegation led by Trade Undersecretary Adrian Cristobal Jr. visited Brussels in Belgium.

During the last meeting, Hattum said both parties agreed that progress is being made and another meeting should take place again this year to continue discussions to define the parameters of the FTA.

“Since then, we are are waiting for a good moment for our new Commissioner who came to office in November last year…to have a meeting with (Trade) Secretary (Gregory) Domingo to discuss the next steps,” he said.

While the date for the next meeting has yet to be firmed up, he said the EU is closely looking at the economic reforms being undertaken by the Philippines.

Among the reforms in the Philippines the EU is concerned with are the passage of the competition law, the Customs Modernization and Tariff Act, and improvements to the procurement policy.

“This kind of economic reform process shows that the Philippines is ready to sign up to an ambitious agreement and that’s a bit what the EU is after. We are not after simply reduction of tariffs. You have that already. GSP+ (Generalized System of Preferences Plus) is giving you tremendous kind of benefits so you don’t need an FTA for that to see it. If you’re going more depth, talking about procurement policy, competition policy, the investment policy, services, that’s where probably the added value of an FTA could be,” Hattum said.

In December, the Philippines was granted beneficiary status to the EU GSP+, a scheme which allows duty-free entry of 6,274 products to the bloc for 10 years.

Prior to securing EU GSP+ status, the Philippines was a beneficiary of the regular GSP program which only covered 6,209 products, with 2,442 products subject to zero duty and the rest slapped with lower tariffs.

While the country is enjoying trade preferences to the EU at the moment, Cristobal said earlier the government would want to have an FTA with the bloc within four to five years to make the benefits permanent.

This, as the EU GSP+ scheme’s benefits can only be provided to low middle income countries and the Philippines which has a per capita income of $3,000 is expected to reach the middle income category or $4,000 per capita income level in the next few years.

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