Philippines, EU move closer to a free-trade agreement

MANILA, Philippines — The Philippines and the European Union have reached "substantial agreement" on a free-trade pact after a decade of stop-start negotiations, putting the long-sought deal within reach of a possible signing in 2027.

The agreement is not finished, however, and negotiators must settle the remaining details before the pact can move through formal approval, signature and ratification procedures.

Trade Secretary Cristina Roque and EU Commissioner for Trade and Economic Security Maroš Šef?ovi? instructed their negotiating teams to finalize the agreement "as soon as possible."

European Commission President Ursula von der Leyen, following a separate call with President Ferdinand Marcos Jr., said the two sides were "about to conclude talks." She said she looked forward to returning to the Philippines in 2027 to sign the agreement.

The proposed Philippines-EU Free Trade Agreement would cover tariffs on goods as well as services, investment, government procurement, digital trade, intellectual property and other rules governing cross-border business.

Both sides expect the pact to deepen trade and investment ties, diversify supply chains and give companies more predictable access to each other's markets.

The EU is already one of the Philippines' largest economic partners.

Two-way trade in goods reached €17.6 billion in 2025, making the EU the Philippines' fourth-largest trading partner and accounting for 8.3% of its total goods trade, according to European Commission data.

Trade in services totaled €10.3 billion in 2024, while the stock of EU foreign direct investment in the Philippines stood at €15.4 billion.

Philippine exporters already enjoy preferential access to the European market through the EU's Generalised Scheme of Preferences Plus, or GSP+.

The program grants zero tariffs on roughly two-thirds of EU product categories, subject to the Philippines' continued compliance with international conventions on human and labor rights, environmental protection and good governance.

An FTA would eventually replace that unilateral arrangement with a reciprocal framework negotiated by both sides.

For Philippine exporters, the deal could provide more predictable access to a market of more than 400 million consumers and potentially broader tariff and non-tariff advantages than GSP+ offers.

European companies, meanwhile, are seeking greater access to the Philippine market and clearer rules for investment and government procurement.

Roque and Šef?ovi? said the agreement would create opportunities for businesses, including micro, small and medium enterprises, farmers and manufacturers. They also cited more diversified supply chains as a strategic benefit amid geopolitical and economic uncertainty.

The Philippines and the EU launched free-trade negotiations in 2015 but held only two rounds before talks stalled in 2017.

Technical stocktaking—a form of preliminary review—began in 2023, followed by the formal resumption of negotiations in March 2024. Six negotiating rounds were held through May 2026.

Once the remaining issues are settled, the pact must still clear legal and political procedures before it can take effect.

Von der Leyen described the prospective deal as part of the EU's broader push for deeper economic ties with Southeast Asia. The bloc views bilateral agreements with individual ASEAN economies as building blocks toward stronger region-to-region trade ties.

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