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EU, Philippines to reopen trade talks, deepen security ties

July 31, 2023

During a rare visit to the Philippines, EU Commission chief Ursula von der Leyen said the EU is relaunching stalled trade talks, while providing funding for digital connectivity and improved maritime security.

Philippine President Ferdinand Marcos Jr. walks with European Commission President Ursula von der Leyen during arrival honours at the Malacanang presidential palace in Manila
This is the first such visit from a high-level EU official in six decadesImage: Rolex dela Pena/Reuters

European Commission President Ursula von der Leyen met with Philippine President Ferdinand Marcos Jr. on Monday in a bid to improve ties that had soured in recent years over human rights issues

Von der Leyen said in a joint statement that the first visit of a EU commissioner to the Philippines in 60 years of diplomatic relations would help to "accelerate a new era of cooperation."

At the top of the agenda was an agreement to relaunch stalled free trade negotiations. 

"I am very glad that we have decided to relaunch negotiations for a free-trade agreement. Our teams will get to work right now on setting the right conditions so that we can get back to the negotiations. A free-trade agreement has huge potential for both of us in terms of growth and jobs," von der Leyen said.

She stressed that the EU wants to diversify supply lines and "de-risk" trade relations. This comes as Russia's invasion of Ukraine has exposed Europe's dependency on Russian fossil fuels, which in turn has led to questions over trade and supply chain dependencies involving China

"We have all learnt the hard way the cost of economic dependencies. We need to diversify our supply lines and make them resilient," von der Leyen said.  

Von der Leyen added that the EU would provide €466 million ($514 million) in funding to for the "transition to a circular economy, and the generation of green energy" through the Global Gateway sustainable investment plan. The EU is also set to launch a "digital economy package" to improve connectivity and make the Philippines more attractive for European businesses. 

The EU is the Philippines' fourth-largest trading partner. 

Philippines eyes stronger economic cooperation with Germany

Tensions over human rights abuses 

The EU currently has a special trade agreement with the Philippines known as the Generalized Scheme of Preferences Plus (GSP+), allowing for tax-free export of around 6,270 products to the EU. 

The cuts on import duties are in exchange for implementing conventions on human rights, environmental protection and good governance. This arrangement is set to expire in December 2023, but the Philippines could apply for an extension. 

Free trade talks began in 2015 under former President Benigno Aquino, but stalled under the administration of his immediate predecessor, Rodrigo Duterte. 

The "drug war" carried out by Duterte, during which more than 6,000 suspects were killed, drew heavy criticism from the EU. Duterte responded with a profanity-laced tirade, which frayed relations. 

The alleged human rights violations sparked an investigation in the International Criminal Court (ICC) court for possible crimes against humanity. In 2018, Duerte withdrew the Philippines from the ICC, worsening ties.

In 2017, he also imprisoned opposition leader, and then-senator, Leila de Lima on drug charges, which were allegedly fabricated by Duterte's officials in in response to her criticism.

The EU has repeatedly demanded the release of de Lima and Philippine accountability in the drug-related killings. In February, a group of EU lawmakers said that Manila's chances of  GSP+ renewal depended on whether the country rejoined the ICC. 

"The European Parliament has been quite clear that whoever wants to have preferential access to the European market needs to uphold social standards, human rights standards, environmental standards," said Hannah Neumann, leader of the EU delegation to Philippines in February. "This is not going to go away."

Von der Leyen on Monday did not address whether or not there had been progress on the EU's human rights concerns. Marcos said earlier this month that he would not cooperate with the ICC probe. Marcos has argued that the crimes should be prosecuted in the Philippines and his Justice Ministry has said it will carry out a fair investigation.

Finding evidence of Duterte's war on drugs

South China Sea security 

Apart from discussing the free trade agreement, the two leaders also agreed to strengthen cooperation on maritime security in the South China Sea. China claims almost the entirety of the sea as its territory, and has built military installations while dispatching coast guard vessels to harass Philippine fishing boats.  The EU has said it wants to play a great role in ensuring security in the Indo-Pacific. 

"We are ready to strengthen the cooperation with the Philippines on maritime security in the region by sharing information, conducting threat assessment and building the capacity of your coast guard," she said in a joint statement. 

The Philippines plays a central role in the geopolitical rivalry in the South China Sea amid tension between the US and China. In April, the US and Philippines carried out their largest joint military exercises to date, which were seen as a signal to Beijing. 

US promises 'ironclad' defense of Philippines

mk/wmr (Reuters, AP)