Doing FTAs with the European Union
Business Mirror
January 18, 2017

THE Philippines-EU free-trade agreement (PHL-EU FTA) is an essential component of the Philippines’s trade and investment strategy for Europe.

After two formal scoping meetings held in November 2014 and September 2015, and numerous intersessional engagements, the PHL-EU FTA negotiations were formally launched on December 22, 2015.

The first round of negotiations took place in Brussels from May 23 to 27, 2016. At this stage, there was no exchange of texts between the Philippines and the EU, because the main objective of the first round was to establish clarity on respective approaches, ambitions and expectations in the different topical areas for negotiation: trade in goods, rules of origin, sanitary and phytosanitary measures (SPS), services and investments, intellectual property rights (including geographical indications), competition, trade and sustainable development and dispute settlement. Negotiating groups on technical barriers to trade (TBT), customs procedures and trade facilitation, and government procurement did not convene during the first round.

The second round is scheduled in Manila from February 13 to 17, 2017. An exchange of proposed texts for each of the negotiating areas is soon expected in the lead up to the second round.

In this new article, we take a closer look at the EU’s record in terms of FTAs negotiated, concluded and implemented. We also delve into the highly complex processes that bind the EU and its member-states with FTA partners.


The EU’s commitment to free trade

THE EU is a keen supporter of trade agreements, because it represents the world’s largest trading bloc formed by its 28 member-states. It has been estimated by the International Monetary Fund that 90 percent of global demand will come from outside the EU over the next several years. As a result, the EU has most to gain from global trade liberalization through bilateral FTAs. By our count, the EU has in place FTAs with 65 countries, which take on different forms and names.

There are three types of agreements the EU negotiates and concludes: (1) free trade, economic partnership and association agreements; (2) customs unions; and (3) partnership and cooperation agreements.

A free-trade and economic partnership agreement is a legal framework that significantly reduces or completely removes tariffs in bilateral trade. An association agreement is a treaty that creates a framework for cooperation and includes political, social, cultural, trade and security dimensions. It is a step further than an FTA as it aims to align the third country with the EU’s standards and values. To be continued