Philippines batting for chapter on MSMEs in free trade deal with European Union

THE PHILIPPINES is proposing a chapter on micro, small and medium enterprises (MSMEs) in its free trade agreement (FTA) with the European Union (EU), the Philippine Exporters Confederation, Inc. (Philexport) said.

In a statement on Thursday, Philexport said the MSME provision became apparent as the Department of Trade and Industry (DTI) sought industry input on the Philippines-EU FTA, the ASEAN Digital Economy Framework Agreement (DEFA), and the World Trade Organization (WTO) E-Commerce Joint Statement Initiative.

“In all the trade negotiations, the Philippine negotiating team always tries to include MSMEs in the discussions,” Philexport said, citing Trade Undersecretary Allan B. Gepty.

“The Philippines has always been a strong advocate of including an MSME chapter in the agreement. In all fora, whenever there is an opportunity, we make sure that there is always an element, provision, or, better, a chapter involving MSMEs,” it added.

The chapter on the MSME aims to ensure that both parties are aware of the role of MSMEs in global trade and the need for technical assistance and capacity-building.

According to Philexport, the Philippines hopes to conclude the FTA talks by 2026 to avoid any disruptions in its trade privileges once the Philippines loses its eligibility for the EU Generalized Scheme of Preference Plus.

“The next rounds of negotiation will be held in February, June, and October … 2025 is crucial as they hope to finish as many provisions as they can next year for the targeted conclusion of deliberations by 2026,” it added.

The proposed elements of the FTA include trade in goods, rules of origin, customs and trade facilitation, trade remedies, technical barriers to trade, sanitary measures, services and investment, digital trade, government procurement, intellectual property, and competition, subsidies, and state-owned enterprises;

MSMEs, energy and raw materials, trade and sustainable development, sustainable food systems, transparency and good regulatory practices, dispute settlement, initial, general, final, and institutional provisions, and exceptions.

The EU is expected to negotiate for maximum access for almost all of its products, particularly meat, other agricultural products, electronics, and automotive products, while the Philippines will also be pushing for the maximum access for its agricultural exports.

Meanwhile, Mr. Gepty consulted industry on the ASEAN DEFA, which is aimed at accelerating digital economy transformation.

According to the DTI, ASEAN DEFA “is a comprehensive agreement on e-commerce and digital economy, encompassing not only traditional areas of cross-border e-commerce and customs duties but also data flows and cybersecurity, payments, paperless trading, digital ID, competition, talent mobility, and other emerging topics like AI and block chains.”

Negotiations for the agreement started in September 2023 and are targeted to conclude next year.

The DTI also sought comments on the WTO E-Commerce Joint Statement Initiative, which aims to establish global digital trade rules to reap the benefits and opportunities provided by e-commerce. — Justine Irish D. Tabile