Philippines-EU free trade agreement seen next year

MANILA, Philippines — The Philippines and the European Union are expected to sign a free trade agreement (FTA) next year after the conclusion of negotiations.

“We just agreed on a EU-Philippine trade deal!” European Commission President Ursula von der Leyen said on X yesterday after meeting with President Marcos. “This comes just three years after my visit to Manila to relaunch the negotiations,” she added.

Trade Secretary Cristina Roque and European Commissioner for Trade and Economic Security Maros Sefcovic also announced the development in a joint statement.

“It is essentially concluded,” EU Ambassador Massimo Santoro told reporters covering the ASEAN-EU Business Summit, referring to the trade deal.

He said there is still some work to be finalized on residual elements and the agreement would need to go through legal scrubbing to make it ready for a formal launch.

Roque and Sefcovic said that the FTA is expected to create new opportunities for micro, small and medium enterprises, as well as farmers, manufacturers and consumers on both sides.

The deal is also expected to bring more investment and create more jobs.

In addition, it will support the parties’ shared priorities on sustainable development and the clean and digital transitions.

President Marcos described the conclusions of the free trade talks as an “important milestone” as he vowed to ensure that the opportunities arising from it will benefit Filipinos.

“This is an important milestone in our strong partnership with the European Union and our shared commitment to open and fair trade. The agreement will bring more opportunities for business and investment, create more jobs and support stronger and more diversified supply chains,” Marcos said in a statement hours after his phone call with von der Leyen.

“We will work to ensure that these opportunities reach our Filipino farmers, manufacturers, consumers and MSMEs (micro, small and medium enterprises), while opening new possibilities for the Philippines in AI (artificial intelligence), digital technologies and other important sectors,” he added.

Amid geopolitical and geoeconomic challenges, the FTA is expected to diversify supply chains and provide fair and predictable rules.

After the signing, the FTA will have to be ratified by the Philippine government and European Parliament.

Negotiations for the Philippines-EU FTA were launched in 2015, followed by two rounds, before being put on hold amid the EU’s concerns over the war on drugs waged by the Duterte administration. In 2024, the Philippines and EU agreed to resume FTA negotiations.

Santoro said the parties are aiming to have the FTA in force before the EU Generalized Scheme of Preferences Plus (GSP+) expires by end-2027.

“We wish to be quick in putting this into force,” he said. The Philippines is a beneficiary of the GSP+, which allows the duty-free entry of 6,274 products to the EU.

“The FTA is much more encompassing than the GSP+,” Santoro said.

European Chamber of Commerce of the Philippines president Diana Edralin said that the FTA provides a predictable foundation for trade and development between the Philippines and EU.

“We strongly urge legislators and political leaders from both the Philippines and the EU to demonstrate swift, decisive commitment to the ratification process,” she said.

“Ensuring an expedited legislative approval in both the Philippine Congress and the European Parliament will allow our business communities, workforce and consumers to realize the full economic dividends of this historic pact without delay,” she added.

German-Philippine Chamber of Commerce and Industry president Christian Scheld said that German businesses are ready to turn the FTA into investments and jobs in the Philippines.

“GPCCI looks forward on its official documentation and ratification well ahead of the expiry of GSP+ in 2027, so that Philippine exporters face no gap in market access,” he said.

For Philippine Chamber of Commerce and Industry president Ferdinand Ferrer, the conclusion of the Philippines-EU FTA reinforces the country’s growing integration into the global economy.

“The business community must now position itself to fully maximize the opportunities that this comprehensive agreement will bring. This FTA has the potential to unlock new growth areas for Philippine enterprises, particularly small and medium-sized enterprises seeking to expand their presence in international markets,” he said.

Philippine Exporters Confederation Inc. president Sergio Ortiz-Luis Jr. said that the development is welcome news for Philippine exporters.

“The EU is a major and high-value market, and an FTA can give our exporters greater market access, more predictable trading conditions, and a stronger platform for expanding Philippine products and services in Europe,” he said.

Federation of Philippine Industries chair Elizabeth Lee said that the Philippines-EU FTA could help position the country as a resilient sourcing and production hub for European firms.

“The real prize is not just market access. It is attracting the investments that create factories, transfer technology and generate quality jobs for Filipinos,” she said.

Last year, the EU was the Philippines’ fourth largest trading partner with trade in goods amounting to 17.6 billion euros ($20.2 billion).

“We strongly believe a regional deal would provide a competitive edge for European and Southeast Asian companies alike, bringing trade and investment to a level that reflects the scale and strategic importance of the ASEAN-EU relationship,” EU-ASEAN Business Council chair Jens Ruebbert said.

The EU has FTAs with Singapore and Vietnam, and finalized the negotiations for its FTA with Indonesia in September last year. — Pia Lee-Brago, Alexis Romero

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