Philippines: EU remains interested in FTA
Manila Bulletin | October 3, 2011
EU remains interested in FTA
MANILA, Philippines — The European Union continues to seek a free trade agreement with the Philippines as it is seen to be the key in increasing foreign investments into the Philippines, including the green and renewable energy sector.
During the membership meeting of the Filipino-Chinese General Chamber of Commerce Inc., head of the EU delegation to the Philippines Ambassador Guy Ledoux said though that getting to an FTA is a lengthy process but, “if the Philippines and the EU sign the free trade agreement, there will be a big boost in foreign investment for the Philippines.”
He noted that, among Association of Southeast Asian Nations, the EU has already started negotiations with Singapore and Malaysia last year.
Ledoux said the Philippine government is still in consultation with stakeholders and, “if these consultations confirm the Philippines’ interest in FTA negotiation with the EU, the next step could be a scoping exercise to identify common objectives on all key issues.”
He said that, in the short term, having an FTA between the EU and the Philippines will allow the most competitive sectors of each side to immediately boost their exports while weaker ones will face tougher competition.
It will also attract green high-tech investments into renewable energy while costs for consumers and users will decrease and thus boost competitiveness of the two economies.
On the longer term, Ledoux said a FTA would increase investment overall, increase economies of scale and result in more efficient resource allocation. It will also result in emulation, innovation and technology transfer.
“The benefit of integration on the long run is difficult to estimate precisely but has often been the most positive effect,” he added.
Ledoux said the EU is the largest source of foreign direct investments and recorded $407 billion in outward FDI flows last year compared to $328.9 billion from the United States and $68 billion from China.
EU is ASEAN’s second largest trading partner after China with trade in goods amounting to 147 billion euros. Trade with the Philippines amounted to 9.1 billion euros in 2010.
Ledoux said the EU is also the largest investor in ASEAN countries at an average of 9.1 billion euros a year from 2006 to 2009. (JAL)
