THE Department of Trade and Industry (DTI) said it will court European businesses to use the Philippines as a manufacturing base, among others, as it aims to resume the Philippines-European Free Trade Agreement (PH-EU FTA) negotiations.
“The FTA will be a stable platform to optimize the benefits of the large market in the EU and can take advantage of the Philippines’s existing FTA network by increasing its investments in the manufacturing sector and accessing the big market in the region,” the Trade department told reporters in a Viber message on Thursday.
According to DTI, a bilateral FTA with the Philippines is “consistent” with the EU’s Indo-Pacific strategy. Likewise, the agency noted, the Philippines can support the EU’s goal to diversify suppliers and enhance its cooperation on supply chains in the Asean region.
“There is a big opportunity for EU businesses to expand in the Philippines—not just to access our huge domestic market—but equally important, to use the Philippines as a base for manufacturing,” the Trade department added.
The abovementioned goals are just some of those listed in the agency’s trade agenda as Trade Secretary Alfredo E. Pascual is set to participate in the European Union- Association of Southeast Asian Nations (EU-Asean) Business Summit in Brussels next week.
The Trade department also said its long-term goal is to resume the PH-EU FTA negotiations, noting that this trade agreement is the “more important and permanent mechanism” in the Philippines’s relationship with the EU. Meanwhile, it added, the generalized scheme of preferences plus (GSP+) is “just a stepping-stone towards it.”
DTI said it remains committed to maintaining the Philippines’s EU GSP+ beneficiary status. As the special incentive arrangement with the EU is set to expire in 2023, the DTI said the Philippines will apply under the new scheme.
In fact, Trade Secretary Alfredo E. Pascual will be a panelist in one of the activities during the Summit to pursue the GSP+ and FTA agenda.
Citing a 2020 study, Pascual said two months ago that 83 percent of German companies want to resume the FTA negotiations, citing the huge potential for EU companies, with the FTA “positively” affecting competitiveness.
The European Union is the Philippines’s 5th largest trading partner in 2020. The country’s “strategic objectives” in engaging the EU in an FTA are: to secure additional duty-free market access beyond those covered under the GSP+ scheme and on a permanent basis; provide a conducive framework for attracting greater investments from the EU; and be on a par with other Asean member states who are aggressively pursuing FTAs with the EU.