EU and Philippines Reach Substantial Agreement on Free Trade Deal
The EU and the Philippines have reached substantial agreement on a free trade deal covering nearly €30 billion in annual trade, with finalisation expected within one to two years.
The European Union and the Philippines have reached substantial agreement on a new free trade deal, as Brussels continues to pursue bilateral arrangements aimed at diversifying its economy amid tensions with traditional trading partners including China, Russia and the United States.
EU Trade Commissioner Maroš Šefčovič said he and Philippine Trade Secretary María Cristina Aldeguer-Roque structured the agreement to expand the nearly €30 billion (around $35 billion) in annual trade between the 27-nation bloc and the Southeast Asian nation of 115 million people.
Speaking at a press conference in Brussels, Šefčovič said the deal would deliver "stronger, more diversified supply chains at the moment when resilience has become a strategic priority," pointing to semiconductors as one clear example. He also cited new investment potential in renewable energy, where the Philippines is keen to build capacity, adding that bilateral trade has room to grow well beyond current levels.
Beyond the economics, the commissioner said the agreement signals that the EU is reinforcing its engagement with the Indo-Pacific. He credited negotiating teams on both sides for their good-faith work, describing the outcome as a result both the EU and the Philippines can be proud of.
Šefčovič indicated that the key parameters have been approved at the political level and must now be translated into legal text. In the meantime, officials will brief EU member states and the European Parliament and prepare the legal version of the text for signature by both sides. He expects the deal to be finalised within a year or two, after which parliaments on both sides will need to ratify it.
Trade between the two sides is dominated by electronics. The EU exports aircraft, pork and pharmaceuticals, while importing semiconductors, integrated circuits and industrial machinery made in the Philippines.
The Philippines becomes the third nation from the ASEAN bloc, after Vietnam and Singapore, to sign a bilateral trade deal with the EU. Negotiations are ongoing between the European Commission and Thailand, Indonesia and Malaysia, while a larger free trade agreement is hoped for in the long term between ASEAN itself and the EU.
The bloc has sought growth and stability through new trade links from Australia to Argentina as it navigates a geopolitical maelstrom that includes conflicts in the Middle East and the war in Ukraine.