With bilateral trade in goods amounting to €14.2 billion in 2017, the EU ranked as the Philippines' fourth largest trading partner, while the Philippines was EU's sixth largest trading partner in the Association of Southeast Asia Nations (ASEAN). Philippines' exports to the EU grew by 12.7% according to Comext– an effect mostly due to an uptake in GSP+-related exports; in 2016, the GSP+ utilisation rate of the Philippines was 71%.
In 2015, EU share in the total trade of the Philippines was 11% but the relationship changed from the EU being a stronger import partner to a stronger export partner of the Philippines. In the recent years, the Philippines moved from trade deficit to a surplus of €960 million in 2017. Overall, the trend of increasing trade and investment continued in 2017, a consequence of more demand, preferential treatment under GSP+ and a more positive business climate resulting in more business missions from the EU to the country.
Top products traded between the EU and the Philippines are dominated by machinery, transport equipment; machinery; chemicals, food products and electronic components. Office and telecommunication equipment and machinery are the strongest export product of the Philippines to the EU but growth in other sectors can be noted thanks to the GSP+-preferences.
Philippines total trade in services with the world according to the World Bank in 2014 is 16% of GDP at market prices (around US$ 46 billion (€38 billion). Bilateral trade in services between EU and the Philippines in 2014 was €3.3 billion, 5% growth from 2013. Import (from Philippines) and export (to the Philippines) of services grew by 6% and 3% respectively. The Philippines also had a steady export of services in the tourism and transport sector.
The Philippines and ASEAN
The Philippines is one of the 10 members of the Association of Southeast Asian Nations (ASEAN), the fifth largest economy in the region and, with a population of over 100 million, the second biggest market in ASEAN.
Taken as a whole, ASEAN would rank as the eighth economy in the world and the EU's third largest trading partner outside Europe, after the United States and China. In 2013, bilateral trade in goods and services between the EU and ASEAN reached more than €235 billion.
When completed, the ASEAN Economic Community will constitute the third largest market in the world, with more than 600 million potential consumers. Ensuring better access for EU exporters to the dynamic ASEAN market is a priority for the EU.
Since identifying ASEAN as a priority region in 2006, the EU has been actively engaged with the region. Negotiations for a region-to-region FTA with ASEAN were launched in 2007 and paused in 2009 to give way to bilateral negotiations, which should be building blocks towards a future region-to-region agreement.
Bilateral negotiations were launched with Singapore and Malaysia in 2010, with Vietnam in 2012, with Thailand in 2013 and now also with the Philippines. The talks with Singapore and Vietnam were successfully concluded in 2014 and 2015 respectively.
Trade-related technical assistance
The EU has recast its development efforts on trade to help developing countries reduce poverty and provide sustainable opportunities for growth.
Since the establishment of the Doha Development Agenda (DDA) as the trade-negotiation round of the World Trade Organisation (WTO), the EU has strongly advocated open rules-based trade negotiations to ensure fair, free, and safe trade. On October 2007, the EU adopted the EU Aid for Trade Strategy to help developing countries to better integrate into the world trading system and to use trade to help eradicate poverty in the context of sustainable development.
The EU also provides considerable development assistance to third world countries to help them meet their responsibilities in the evolving global trading system, in which new rules and regulations aim at ensuring public health and public safety.
The EU is a firm supporter of the WTO, which lays down a set of rules to help open up global trade and ensure fair treatment for all participants (http://www.ec.europa.eu/trade/).
The Philippines is fully committed to multilateral trade arrangements and to the liberalisation of its trade and economy. But a number of technical issues have impeded its active participation in global trade and reduced its ability to benefit from such global arrangements.
Towards the end of the 2004, the EU and Philippines agreed to cooperate to deal with these problems. In 2005, the first Trade Related Technical Assistance (TRTA) was formalized between the EU and the Philippines. The EU provided PhP 210 million (3.5m euro) for this technical assistance. TRTA 1 concluded in the third quarter of 2008 and was succeeded with two phases of TRTA.