Of EU business and summits: What is the point?

October 20, 2017 In-Focus

On Oct. 17 the EU Philippines Business Summit took place at a time when EU-Philippines commercial relations are at an all-time high. Besides numerous business colleagues from the EU and the Philippines, I particularly enjoyed hearing from the House and Senate economic and trade committee chairs about the ongoing economic reforms. These will be the foundation for further industry engagement with the country and the country’s longer-term pro-poor inclusive growth agenda. Trade Secretary Lopez and Vice President Robredo gave strong support to further strengthening commercial and political relations between the EU and the Philippines.

My particular thanks goes to the European Chamber of Commerce of the Philippines for organising such an event which can be a daunting job. While you will agree with me that there are probably too many events to attend these days, this one was special. Let me explain what the point of the summit was; or rather the three main heights:

First, the strong presence of industry, government, and legislative sent an important signal that the EU and the Philippines work constructively together to bring our partnership forward. The topics discussed were all close to our hearts whether it was about the initiatives to amend laws such as the Anti-Red Tape Act; the Public Services Act; or universal health care. All these good initiatives of economic reforms will bring more business from Europe to the Philippines, will bring more competition and thus more quality and choice for Filipinos at lower prices. It will help introducing European technology on Filipino roads (in and outside cars); providing the best possible healthcare; taking advantage of digital trade; and supporting the country’s Build. Build. Build. agenda. If economic reforms continue, the Philippines’ growth will accelerate and the country will reach its upper middle income status sooner and this summit helped to spell out our ambitions. 

Second highlight is that the EU is contributing, and more than what any other partner is: the European economy is growing at a very strong rate of 2.4%. This has led to a significant increase in EU imports from the rest of the world. In trade and economics, size matters. The Philippines is enjoying, as never before, increased access to the EU’s vast market through its GSP+ status, and we are now seeing how exporters increasingly are using this special benefit: Philippine exports to the EU have increased remarkably, with the latest figures from the Philippine Statistics Authority showing an increase of 36% in the first half of 2017 alone. Philippine goods exported to the EU amounted to over $4.6 billion. This makes the EU the second largest market for Filipino exporters. Particularly strong growth can be seen in sectors benefiting from GSP+ trade preferences, such as agri-food where Philippine exports reached almost P60 billion last year, helping coconut and cocoa farmers alike. For years the EU has been and still is the largest provider of foreign direct investment in the Philippines. We have created over 500,000 jobs, not only in Manila, but all over the country. During the first half of 2017, 29% of all newly reported, approved investments in the Philippines were sourced from the EU.

Third, the summit comes at a time when the political and the trade policy profiles of Europe are changing. Europe is increasingly taking the lead in securing the multilateral trading system that has served the world so well in the past 70 years. We believe that the multilateral trading system serve us and the world best. It provides predictability, fairness by having and enforcing rules that are mutually and multilaterally binding. Without multilateral rules we risk returning to the law of the jungle. This would not be in the interest of ASEAN or of the EU.  These past few months have seen the EU make huge strides on international trade. On Sept. 21, the EU-Canada Comprehensive Economic and Trade Agreement (CETA) entered into force provisionally. In July, the EU and Japan reached an agreement in principle on the main elements of an EU-Japan Economic Partnership Agreement. This will be the most important bilateral trade agreement ever concluded by the EU and as such will, for the first time, include a specific commitment to the Paris climate agreement. A Free Trade Agreement between the EU and ASEAN is also back on the cards. This was announced in March when the EU Trade Commissioner, Cecilia Malmström, attended the EU-ASEAN Economic Ministerial in Manila.

So while on the business side industry is doing a great job, on the so-called political side, the overall relations, it is important that we too – EU and the Philippines together – do our best to promote our shared interests. Our interests are in fact deeply shared: strong beliefs in the rule of law, the multilateral system, the UN institutions, deep historical and cultural links and extensive people to people contacts. Europeans coming here feel easily at home and so do Filipinos going to Europe. For the past 60 years, with the signing of the treaty of Rome, the values on which the European Union is built have not changed: peace, freedom, tolerance, solidarity and the rule of law. These values bind and unite Europeans. Our “Progressive Trade Policy to Harness Globalisation” spells out EU’s ambition to lead so that global trade will be shaped and managed to ensure it is fair, projects values and remains firmly anchored in a rules-based system. We aim to safeguard high standards of environmental, consumer, social and labour protection as well as fundamental rights without compromise. EU’s trade strategy is about leaving nobody behind, it is about supporting decent work by making trade more effective at creating sustainable economic opportunities.

So did we reach the point of the summit? While being there provides for new perspectives, it also backs the question: can one go higher from here or is it all downhill? Yet, in Haiti one would say that “Beyond the mountain is another mountain.” which is true for sure. But my Chinese friend would add that “Mountain of Dao, sea of learning” (Dào shān xué hai). If we want to reach our next summit, of EU-Philippines relations, we need to go through a “sea of learning.”

My question to the Philippines is, do you want to swim with us through that sea to reach our next summit? Do you want to lead with us to help shape the world in the future so that trade and investment benefits also, and especially, those people that are left behind?