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Philippines, EU eye closer economic, security ties

February 28, 2023

Manila says it is turning around its human rights image after a brutal drug war by the country's former president. That may be enough for the EU to renew a trade program and restart talks toward a free trade agreement.

Philippine President Ferdinand Marcos Jr. delivering a speech
Marcos Jr., the namesake son of an ousted dictator, pledges to make good on promises to turn around his country's image on human rightsImage: Jam Sta Rosa/REUTERS

A visit to Manila last week by the European Parliament's subcommittee on human rights appears to be another step toward rapprochement and a potential catalyst to the resumption of stalled talks toward a free trade agreement.  

Relations with the usually pro-Western country deteriorated in recent years. The populist former President Rodrigo Duterte, who left office last year, frequently criticized Brussels over what he saw as its lecturing, while the EU was unequivocal in its condemnation of his brutal drug war.

According to the government, about 6,000 people were killed, but human rights groups report that the death toll is far higher. The Duterte administration is also accused of weakening political and human rights across the board.

EU-Philippine free trade talks, which began in late 2015, were a casualty as negotiations stalled in February 2017. But President Ferdinand Marcos Jr., who took office last June, has vowed to restore good ties with democratic countries, especially its treaty ally the US, and adopt a muscular foreign policy in light of his country's disputes with Beijing in the South China Sea.

Marcos Jr., the namesake son of an ousted dictator, also pledges to make good on promises to turn around his country's image on human rights, understanding this to be a prerequisite to improving economic relations with the European Union, the nation's fourth-largest trade partner.

Signs of improvement

The human rights situation is "not as bad as during the Duterte administration. ... But the challenge now is to ensure accountability and to investigate all those violations before," said Carlos H. Conde, a senior researcher at the Asia division of Human Rights Watch, covering the Philippines.

Hannah Neumann, the European Parliament subcommittee's vice president and a member of the delegation to Manila, told local media that under Marcos Jr. the human rights situation is "better than it was under President Duterte."

The visit "came at a good point in time to assess the more constructive attitude of the new administration and to send the clear message that we expect implementation of the many promises made," she told DW afterward.

"The hand for trade talks is outstretched," she said. "But trade with the EU rests on two pillars: privileged access and implementation of social, human rights and environmental standards. And one is always linked to the other. This will not change under any new scheme."

Finding evidence of Duterte's war on drugs

More urgent for Manila is the country's place in the European Union's Generalised Scheme of Preferences Plus (GSP+). Access to this preferential trade scheme expires at the end of the year, although Alfredo Pascual, the Philippines' trade secretary, briefed local media over the weekend that he was optimistic of renewal as European officials were "receptive" to the Manila government's claims of having improved human rights and economic liberalization.

The European Parliament subcommittee insinuated that GSP+ renewal might be conditional on Manila's releasing former Senator Leila de Lima, who has been detained since 2017 on allegedly trumped-up drug-trafficking charges. The subcommittee visited her in detention last week.

EU lawmakers are also trying to persuade the current government to have Duterte stand before trial in the International Criminal Court (ICC), said Joshua Bernard Espeña, a resident fellow at the International Development and Security Cooperation, a Manila-based think tank.

A panel of judges at the ICC in The Hague this month authorized investigators to resume inquiry into crimes against humanity. Dutetre pulled the country out of the Rome Statute, which encompasses ICC activity, in 2017, but foreign governments are now pressuring Marcos Jr. to rejoin and allow investigators access to the country.

"Returning to the ICC would be of course a strong sign in which direction the country wants to move," Neumann, the MEP, said last week in Manila.

Trade momentum

Most analysts reckon that the EU will renew the Philippines' GSP+ status while potentially also giving the go-ahead this year to restart talks toward a free trade agreement, a decision that would be made by the European Commission.

Speaking earlier this month, Trade Secretary Pascual warned that the European Union would be "competitively disadvantaged" if delays in restarting talks were to persist.

The European Union's negotiations with Indonesia toward a free trade deal entered their 13th round in January. Thailand's Cabinet in early February approved a motion to restart free trade talks with the European Union. It's feasible that discussions with these three Southeast Asian states — and potentially Malaysia — could recommence before the end of the year.

Lars Wittig, president of the European Chamber of Commerce in the Philippines, said Manila had also recently enacted "major economic reforms," including amendments to the Retail Trade Liberalization Act and Foreign Investment Act, "that show that the Philippines is open and ready for more investments."

At present, just 4% of the total EU foreign direct investment in the ASEAN region is making its way to the Philippines, he said. Trade also has much room for improvement. The International Trade Center, a multilateral body, estimated in 2021 that the Philippines has an export potential of more than €12 billion to the EU, almost double what actual trade was worth that year.

"These relatively low trade and investment figures indicate that considerable potential exists for a free trade agreement between the EU and the Philippines to help develop bilateral relations," Wittig said.

Not just trade

Marcos Jr. is also looking to reinvigorate his country's security alliances and now takes a far more hawkish stance on China than his predecessor, whose attempted pivot to Beijing generated few economic benefits for the Philippines.

Earlier this month, Manila and Washington announced a new deal that would allow American forces access to four more military sites in the country and would recommence joint naval patrols in the South China Sea, where China aggressively contests the territory that an international court in 2016 ruled was under the Philippines' jurisdiction.

A novel defense agreement between the Philippines and Japan was also finalized this month, allowing Japanese troops greater access to Philippine territory.

The European Union's own security agenda in Southeast Asia and the wider Indo-Pacific region remains uncertain. Although Brussels wants to take a more active role, the EU itself lacks any unified military force, and the two member states with security ambitions in the Indo-Pacific — Germany and France — are distracted by the war in Ukraine.

"For the Philippines, credible political support from the EU and Germany in international forums for the South China Sea award of 2016 is crucial. It strengthens Manila's legal position vis-a-vis Beijing," said Alfred Gerstl, an expert on Indo-Pacific international relations at the University of Vienna.

Edited by: Srinivas Mazumdaru