EUROPEAN companies are pushing for the conclusion of a free trade agreement (FTA) between the Philippines and the European Union (EU) to remove obstacles to trade and investments.
Florian Gottein, executive director of the European Chamber of Commerce of the Philippines (ECCP) in a webinar pushed the need to schedule the next round of talks between the EU and Philippine governments on the FTA.
Gottein said Philippine exports to the EU have been primarily driven by the Generalized System of Preferences (GSP) Plus granting duty-free access to thousands of local goods.
“But GSP Plus is time-bound and not all companies can avail of it forever. Therefore (it’s) more important to go forward with the discussion for the FTA agreement between EU and the Philippines. The next round should at least be scheduled,” Gottein said.
Bilateral trade between EU and the Philippines reached a historic high to more than 16 billion euros in 2019 with the numbers balanced. But of the 8 billion euros worth of exports of the Philippines to EU, 2 billion euros worth of goods entered duty-free via GSP Plus.
Gottein added an FTA would also help to address many obstacles EU firms face when they enter the Philippines.
ECCP president Nabil Francis said bureaucracy, lack of infrastructure and market restrictions remain a concern.
“Lots of action have been taken on infrastructure. We have an ambitious Build Build Build program,” Francis said.
But he said the Philippines remains largely restrictive to foreign companies.
He cited the need to fasttrack reforms on public service and retail trade to open the market for more players.
Despite those challenges, Gottein said EU firms agree the Philippines has been and will be a bullish market.
“This market can be connected to EU through an FTA,” he added.
Gottein said with the Corporate Recovery and Tax Incentives for Enterprises Act, government can be more generous on perks and give longer transition to shift to corporate income tax for existing investors in the Philippines especially with the challenges posed by the new coronavirus disease 2019 pandemic.
