After over half a decade of gridlock, the European Union (EU) and Filipino government are attempting to relaunch free trade agreement (FTA) negotiations.
The EU and the Philippines first launched negotiations for a free trade agreement in 2015. The last round of negotiations took place in 2017, and talks have been put on hold since.
On 31 July, European Commission President Ursula von der Leyen and Philippine President Ferdinand Marcos Jr both announced their intentions to relaunch negotiations for an FTA and building closer cooperation with respect to critical raw materials and the energy transition.
The two also met to sign an agreement on the Green Economy Program in the Philippines, in which the EU would provide the Philippines with a grant worth €60M to pursue efforts towards renewable energy and a circular economy.
The EU and the Philippines will soon kick off a bilateral ‘scoping process’ to assess mutual understanding on the future FTA. If this process is successful and after consultations with the Member States, FTA negotiations will resume.
“The Philippines is a key partner for us in the Indo-Pacific region, and with the launch of this scoping process, we are paving the way to taking our partnership to the next level,” commented European Commission president, Ursula.
“Together, we will realize the full potential of our relationship, creating new opportunities for our companies and consumers while also supporting the green transition and fostering a just economy.”
According to S&P, the Philippines currently receives trade preferences under the EU’s Generalized Scheme of Preferences +, an incentive arrangement for sustainable development and good governance, which provides duty-free access to the EU market for two-thirds of tariff lines.
The statement the EU made specifically makes mention of the Philippines’ “major reserves” of critical raw materials, which they consider vital for the manufacture of green technologies.
The most recent US Geological Survey minerals commodity report lists the Philippines as the world’s second-biggest producer of nickel in 2022, accounting for about 10% of the world’s production and nearly 5% of total reserves.
The island country also produces other minerals including chromite, coal, cobalt, copper, feldspar, gold, iron ore, rare earths, and silver.
Confirmation of the resumption of trade negotiations between the EU and the Philippines comes as the European Commission continues to pursue strategic partnerships with mineral-rich countries.
The European Commission has already established strategic partnerships on raw materials with Kazakhstan in March 2020, Canada in June 2021, Ukraine in July 2021, Namibia in November 2022, Argentina in June 2023, and Chile in July 2023.
