Free trade is a powerful force for economic growth and improved quality of life. When two nations enter into a free trade agreement, it reduces the cost of goods and services for their citizens and stimulates demand for the best products that both economies have to offer. Furthermore, the competition that arises from unrestricted trade encourages all stakeholders to enhance their competitiveness in terms of price and quality, driving innovation and efficiency in the market.
However, it is crucial to use free trade agreements properly to avoid exacerbating economic imbalances. If one party fails to maximize the benefits of these agreements, there is a risk that one side will reap most of the gains while the other receives minimal benefits. This is something that the Philippine government, particularly the Marcos administration, must keep in mind as negotiations resume for a potential landmark free trade agreement between the Philippines and the European Union (EU).
The scale of this agreement is significant. As of 2022, the EU is the fourth-largest trading partner of the Philippines, with bilateral trade in goods amounting to P1.1 trillion and services worth P286 billion during that period. The Philippines ranks as the EU’s seventh most important trading partner in the region, and EU companies have made substantial direct investments totaling P835 billion in the country as of 2021. These numbers highlight the immense potential for mutually beneficial growth, especially considering that Philippine exports already receive preferential treatment under Europe’s Generalized Scheme of Preferences Plus scheme.
The Department of Trade and Industry reports that the Philippines’ top exports to Europe currently include crude and coconut oil, vacuum cleaners, tuna products, hair dryers, spectacle lenses, rubber tires, preserved pineapples, fatty alcohols, automobile transmission systems, radio parts, and purifying chemicals. These exports primarily go to the Netherlands, Germany, Italy, France, and Spain. It is important to note that these exports have already benefited various communities, such as General Santos City, Davao City, Cebu, and economic zones in Laguna, Cavite, and Batangas.
As the policymakers engage in negotiations with their European counterparts in the coming months, it is crucial to recognize that the current gains should not be the endpoint. Efforts should be made to improve market access for the Philippine agricultural industry in EU markets, which are notorious for their protective measures. Additionally, Filipino farmers need support and resources to enhance the quality and competitiveness of their products. Other Filipino entrepreneurs should also be equipped with the necessary training and support to enter the European marketplace on equal footing with experienced European counterparts.
Rather than rushing into any deal offered, the policymakers should carefully examine all details and draw upon the lessons learned from previous trade agreements. The aim should be to create a deal that benefits all Filipinos, regardless of their socioeconomic standing. Their vision should encompass wealthy businessmen enjoying reduced tariffs on luxury German cars, middle-class consumers accessing more affordable European wine, Filipino workers finding increased employment opportunities in factories manufacturing goods for export, and farmers successfully selling their produce in European supermarkets.
The upcoming negotiations between the Philippines and Europe should serve as a blueprint for future trade deals, including the highly sought-after agreement with the United States. When utilized correctly, free trade has the power to enhance lives. However, if misused, it can exacerbate existing disparities, leaving the rich wealthier and the poor even worse off. It is essential for the government to keep this in mind throughout the trade negotiations.
Your subscription has been successful. Stay informed with the latest news and information by subscribing to INQUIRER PLUS. With a subscription, you gain access to The Philippine Daily Inquirer and over 70 other titles. You can also share your subscription with up to 5 devices, listen to the news, download articles as early as 4 am, and share them on social media. To subscribe, call 896 6000.
!function(f,b,e,v,n,t,s) {if(f.fbq)return;n=f.fbq=function(){n.callMethod? n.callMethod.apply(n,arguments):n.queue.push(arguments)}; if(!f._fbq)f._fbq=n;n.push=n;n;n.loaded=!0;n.version=’2.0′; n.queue=[];t=b.createElement(e);t.async=!0; t.src=v;s=b.getElementsByTagName(e)[0]; s.parentNode.insertBefore(t,s)}(window,document,’script’, ‘https://connect.facebook.net/en_US/fbevents.js’); fbq(‘init’, ‘2004610026278274’); fbq(‘track’, ‘PageView’);
!function(f,b,e,v,n,t,s) {if(f.fbq)return;n=f.fbq=function(){n.callMethod? n.callMethod.apply(n,arguments):n.push(arguments)}; if(!f._fbq)f._fbq=n;n=n;n.loaded=!0;n.version=’2.0′; n.queue=[];t=b.createElement(e);t.async=!0; t.src=v;s=b.getElementsByTagName(e)[0]; s.parentNode.insertBefore(t,s)}(window, document,’script’, ‘https://connect.facebook.net/en_US/fbevents.js’); fbq(‘init’, ‘767727496894134’); fbq(‘track’, ‘PageView’);
!function(f,b,e,v,n,t,s) {if(f.fbq)return;n=f.fbq=function(){n.callMethod? n.callMethod.apply(n,arguments):n.queue.push(arguments)}; if(!f._fbq)f._fbq=n;n=n;n.loaded=!0;n.version=’2.0′; n.queue=[];t=b.createElement(e);t.async=!0; t.src=v;s=b.getElementsByTagName(e)[0]; s.parentNode.insertBefore(t,s)}(window, document,’script’, ‘https://connect.facebook.net/en_US/fbevents.js’); fbq(‘init’, ‘607491687857238’); fbq(‘track’, ‘PageView’);
Denial of responsibility! VigourTimes is an automatic aggregator of Global media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, and all materials to their authors. For any complaint, please reach us at – [email protected]. We will take necessary action within 24 hours.
