THE electronics, mining, and agriculture industries are positioned to benefit the most from a possible free trade agreement (FTA) with the European Union (EU), the Philippine Economic Zone Authority (PEZA) said.
PEZA Director General Tereso O. Panga said on the sidelines of a joint memorandum circular signing event in Taguig City last week that he welcomed the resumption of FTA negotiations with the EU.
“Electronics has always been our strength. So on top of electronics, if we are able to export as well agro-based products, and mineral products, this will boost our exports to the EU,” Mr. Panga said.
“EU members like Germany and the Netherlands are among our biggest investors in PEZA’s ecozones,” he added.
He said such a deal could simplify compliance for agricultural products for entering specific European markets.
“That should be spelled out in the FTA, including the availment of the Generalized Scheme for Preferences Plus (GSP+); how we can maximize it so that more companies in the Philippines can export to EU,” Mr. Panga said.
On July 31, President Ferdinand R. Marcos, Jr. and European Commission (EC) President Ursula von der Leyen announced the resumption of the Philippines-EU FTA negotiations.
Official FTA negotiations between the EU and the Philippines began in December 2015 and last took place in 2017. The FTA talks have faced delays following disputes on intellectual property rights and data exclusivity, among others.
Trade Secretary Alfredo E. Pascual has announced that the scoping process for the FTA will begin in September and could conclude within the year, while formal negotiations could start in 2024.
Meanwhile, Mr. Panga said the FTA is needed for the protection of Philippine exporters as the country is expected to achieve upper-middle income status by 2025, which would make it ineligible for the GSP+.
“A lot of our locators are exporting to the EU and used to benefit from the GSP+. Now because of this impending renewal, whatever is the case, I think it makes sense for the Philippine government to engage the EU in terms of signing an FTA,” Mr. Panga said.
“Something bilateral between the Philippines and the EU will be more a protection to our exporters to the EU,” he added.
GSP+, set to expire in December, grants the Philippines zero-tariff exports on 6,274 products or 66% of all EU tariff lines.
In June, the EC proposed to extend the validity of the current GSP regulations until Dec. 31, 2027. The proposal still needs the approval of the European Parliament and the European Council.
PEZA recorded a 258% increase in first half investment approvals to P80.59 billion.
This year, PEZA is targeting 10% growth in investment approvals from the P140.7 billion recorded in 2022. — Revin Mikhael D. Ochave