Gepty said the target year for sealing the FTA with the EU is 2027, before the current administration’s term ends.

More importantly, he added, “It is imperative for us to conclude in as soon as possible time our free trade agreement with the European Union so that there will be no disruption when it comes to our exports that enjoy preferential arrangement under the EU GSP+.”

He continued: “We’re working hard to finish this the soonest possible time, but more than that we have an inherent pressure to conclude this ASAP given that as we move forward we’re also hitting the upper middle-income status.”

Gepty explained that under EU GSP+ rules, “if for three consecutive years you have been under the upper middle-income status then you will not qualify anymore for this preferential arrangement. So that is an added pressure point aside from the target to finish it before the end of the term of the President.”

The executive said the hope is to conclude the PH-EU FTA by 2027 and have the accord in effect the following year. He said that if the signing is delayed even as the Philippines’ per capita income continues to climb, it is possible to experience a trade disruption.

We have about three years to negotiate, Gepty said, adding that if no FTA is made after this period, many major exports and industries in the Philippines would be affected since around 23% to 28% of total Philippine exports to the EU utilize the EU GSP+.

Another urgent reason to have the FTA concluded is because a study by the International Trade Centre has estimated that the EU represents some $8.3 billion in untapped export potential for the Philippines, Gepty said.

“The point is that the EU is a major market. There are a lot of opportunities for our stakeholders, and while we are in surplus, the fact remains that there is still untapped export potential,” Gepty stressed.

The European Union is one of the Philippines’ biggest trade and investment partners. The regional bloc is the country’s fifth largest trading partner, sixth biggest export market, and top six import source, according to the DTI. In terms of investment, Germany ranks as the third leading source of FDI for the Philippines while Sweden comes in at 10th place.

Negotiations for a Philippines-EU trade and investment agreement were launched in December 2015. The second round of negotiations took place in February 2017, but the talks were put on hold until the announcement in March 2024 that negotiations will resume.

The EU is seeking to build bilateral trade agreements with Association of Southeast Asian Nations (ASEAN) members to serve as building blocks toward a future region-to-region agreement between the EU and the ASEAN.

Department of Trade and Industry (DTI) Undersecretary Allan Gepty, representing Secretary Fred Pascual, participated in the APEC Ministers Responsible for Trade (MRT) meeting held from May 17 to 18. Themed “Empower. Include. Grow.,” the meeting focused on charting a course toward deeper economic and technical cooperation to boost prosperity and well-being across the Asia-Pacific region.

During discussions on trade liberalization and the outcomes of the 13th World Trade Organization Ministerial Conference, Undersecretary Gepty underscored, “While we did not achieve the outcomes we had hoped for, the Philippines sees this as an opportunity for us to reflect and collaborate more to strengthen the multilateral trading system.

“We need to build on the positive outcomes of MC13 by implementing and advancing the decisions and agreements from the meeting. In this regard, the Philippines reaffirms its commitment to upholding the WTO’s role in fostering a rules-based, non-discriminatory, free, open, fair, transparent, and inclusive multilateral trading system,” Undersecretary Gepty added as he expressed a firm resolution to address the outstanding issues in the WTO.
Highlighting agriculture as a Philippine priority, Undersecretary Gepty urged APEC economies to engage constructively to resolve domestic support and public stockholding issues. He suggested that member economies explore alternative approaches for further discussion in recognition that this is a new subject in APEC.

The Philippines also championed the integration of broader segments into trade, supporting greater inclusion of micro, small, and medium enterprises, women, persons with disabilities, and youth and elderly.

Meanwhile, during the first-ever Joint Women and Trade Ministers’ Ministerial Meeting, DTI Undersecretary Carol Sanchez joined Undersecretary Gepty in sharing about the Philippines’ policies and programs to empower women entrepreneurs in the rapidly growing digital economy. These programs focus on training and support in business skills development, e-commerce, mentoring, digital marketing, technology access, and financing.

Addressing informality is a key priority for Peru’s 2024 APEC chairmanship. To facilitate the transition to the formal and global economy, member economies are collaborating on a roadmap that includes capacity-building and skill development programs. This roadmap will be finalized before the November APEC Leaders’ Summit.

Additionally, APEC Trade Ministers explored the Free Trade Area of the Asia-Pacific, a concept pushed by the Business Advisory Council as APEC’s business arm.

“With the current global economic setting, coupled with many challenges and fast-paced advancement of technology, FTAAP should be viewed more in the context of regional cooperation and economic integration that facilitates not only trade but creates more opportunities for our people under an environment that is fair, and fosters inclusive growth and development”, said Undersecretary Gepty.

The APEC trade ministers successfully concluded the meeting with a statement reaffirming APEC’s commitment to promoting inclusive and interconnected trade and investment across the Asia-Pacific region. On the sidelines of the ministerial meeting, Undersecretary Gepty also met with officials of Chile, Canada, and the United Kingdom to discuss plans for deeper bilateral trade and investment cooperation.

With some reservations from local farmers and lawmakers about the adoption of the Regional Comprehensive Economic Partnership (RCEP), Department of Trade and Industry (DTI) Secretary Fred Pascual bared the Philippine government’s ongoing efforts to create an enabling environment where businesses can thrive during the European Chamber of Commerce of the Philippines (ECCP) Luncheon Meeting held on February 16, 2023, at the Dusit Thani Manila. 

Speaking to the participants and esteemed guests, the Trade Chief unveiled the priorities of the DTI to facilitate increased trade and investment and to improve global competitiveness, “The goal is to grow our economy and develop globally competitive and innovative industries that support inclusive growth and quality of life for all Filipinos”, he said. 

Secretary Pascual also took the opportunity to advocate the ratification of RCEP stating that, “The drive for immediate ratification of the Regional Comprehensive Economic Partnership Agreement and other trade agreements is considered vital to expand the country’s market reach and foster globally competitive economic industries. The possible influx of investments that these agreements would bring will also create employment opportunities for Filipinos.” Likewise, President Ferdinand R. Marcos Jr. earlier emphasized that RCEP would greatly complement the country’s game-changing economic reforms. 

Apart from RCEP, Secretary Pascual urged European businesses to support the Philippines’ re-application for the upcoming renewal of the European Union Generalised Scheme of Preferences Plus (EU-GSP+). This was also supported by Assistant Secretary Allan B. Gepty, who was also present at the Luncheon Meeting and underscored the significant role of the EU-GSP+ during the open forum, “That is why EU-GSP+ is very important because it caters to the demands, the needs of our local stakeholders, and even investors who are exporting to the EU market”, he said. 

Secretary Pascual further reiterated that “the Philippines counts on European businesses’ continued support for our re-application in the upcoming renewal of the EU-GSP+ scheme and our advocacy to resume the PH-EU FTA negotiations. Your business presence here proves that the Philippines stands on sound economic and social reforms.” 

The European Chamber of Commerce of the Philippines (ECCP) is a bilateral foreign chamber that promotes European interests in the Philippines and vice versa. ECCP also organizes business meetings; seminars with resource speakers from the Philippines, Asia, and Europe, which coordinate the position of the business sector; as well as dialogues with the Philippine government officials on important economic issues affecting the Philippine-European business relations.

Under the theme of “ASEAN Matters: Epicentrum of Growth“, Indonesia takes on the Chairmanship of ASEAN for 2023 with a focus on initiatives towards recovery, digital transformation, and sustainability of the region. These efforts are concretized through sixteen (16) Priority Economic Deliverables (PEDs) that cut across the ASEAN Economic Community (AEC) Pillar.  

According to Assistant Secretary Gepty: “ASEAN is now at the center of the global economy. As a single market and production base, economic activities have gravitated towards our region from research and development, product development, manufacturing, innovation, and even the development of creative and digital economy. That is why, ASEAN matters in this era,  and it is important that we remain united and assert our strength and influence in the global economy.”  

“As we implement the RCEP Agreement, upgrade existing ASEAN economic agreements, and embark on new economic trade relations with other partners, ASEAN can help shape international trade rules that work well in a region with diverse culture, legal regime, and levels of development”, Gepty added. 

As country coordinator for Japan, the Philippines also spearheaded the discussion at the Special SEOM-METI Consultations on 16 January 2023 to discuss the celebration of the 50th Anniversary of ASEAN-Japan economic relations this year. Officials exchanged views on the development of the “Future Design and Action Plan of an Innovative Sustainable ASEAN-Japan Economic Partnership” and the private-sector led “ASEAN-Japan Co-Creation Vision” which aims to implement initiatives on supply chain resilience, MSME development, among others.  

“For ASEAN and Japan, we have to ensure that our strong economic ties are further deepened and remain resilient amidst evolving economic and geo-political developments”, mentioned Asec. Gepty. 

The Future Design and Action Plan is envisioned to serve as the roadmap of ASEAN-Japan economic relations in the succeeding years to develop a society that is “safe, prosperous, and free through fair and mutually beneficial economic co-creation based on trust”. 

At the sidelines of the SEOM 1/54 Meeting, officials also convened the inaugural Meeting of the Focal Group for Global Value Chains (FG-GVC), which serves as a platform to advance ASEAN’s work on GVCs and monitor and evaluate overall progress of ASEAN’s GVC-related work.  

The Philippines was represented in the FG-GVC by Mr. Jeremiah Reyes, Commercial Attaché from the Philippine Trade and Investment Centre (PTIC) – Jakarta and Philippine Economic Official to ASEAN. Mr. Reyes expressed support on the proposal of the ASEAN Secretariat to reassess and update the existing ASEAN Work Plan for Enhancing GVC Agenda 2016-2025. ASEAN agreed to upgrade the Work Plan and ensure that it remains aligned with ASEAN’s efforts and initiatives amidst the emerging issues and trends, such as geo-political and geo-economic changes in the region resulting in the reorganization and diversification of supply chains, acceleration of digitalization, and sustainability trends, particularly the development of circular economy. 

The SEOM 1/54 and Related Meetings were convened as a follow-up to the 54^th AEM Meeting last September 2022 and to finalize the economic deliverables to be endorsed by Ministers ahead of 29^th AEM Retreat to be held in March 2023.  

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