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Connectivity and competitiveness: Bridging EU and Asia closer together

October 25, 2018 News

Two significant summits with high importance for EU’s relations with the Philippines were held in Brussels and in Manila on 18 October 2018: the 12th Asia-Europe Meeting (ASEM12) in Brussels and the EU-Philippines Business Summit in Manila. “Connectivity” was at the heart of both events.

The European Union has been very pleased that the first foreign trip of the newly appointed Foreign Affairs Secretary Teodoro Locsin Jr. brought him to Brussels to attend the ASEM12 which was chaired by the President of the European Council Donald Tusk. Bringing together 53 partners from Europe and Asia, ASEM - representing 65% of global GDP, 60% of global population and 55% of global trade - provides a platform to foster political dialogue and strengthen economic cooperation.  I am certain that the participation of Secretary Locsin in ASEM will pave the way for a strengthened bilateral relationship.

 Together with the EU Ambassadors, I attended the EU-Philippines business summit organised by the EU-Philippines Business Network (EPBN) and its partner Chambers and Mr Gunter Taus of the European Chamber of Commerce of the Philippines. There, I had very productive engagements with  Secretaries Ernesto Pernia and Ramon Lopez as well as Director General Charito Plaza  from the Philippine Economic Zone Authority, Senator Sherwin Gatchalian and Congressmen Arthur Yap and Dax Cua.

“Connectivity” these days has become a buzzword – but what does it actually mean and why do we benefit from it? While connectivity is also about infrastructure, movement of goods and services, rules and regulations, it is first of all about bringing people together – connectivity brings about better human interactions. 

 We need to bring all these systems together: networks, people, and opportunities. Questions such as a well-functioning international trading system or about a Free Trade Agreement (FTA) between the EU and the Philippines are about connectivity. We need to better connect the Philippines and the EU so that investors can look at the Philippines as their prime choice when investing in Asia. 

While there have been challenging moments, trade and investment flows between the two economies have improved constantly showing positive trajectory of our commercial relations. Trade is an engine for growth and can play a role in supporting the Philippines to finally reach its upper middle income level. All these will depend on policy choices being made and on how we embrace multilateralism, democracy, press freedom, respect for human rights and free and fair trade. 

 The EU-Philippines trade peaked last year, with two-way trade reaching to €14.1 billion. Two-way total trade grew by 16% in 2017 because of the 32% growth of Philippine products coming into the EU which could partly be attributed to the utilisation of GSP+ preferences. European tourists also increased to more than half a million while $3.4 billion were remitted by over 800,000 Filipinos living in the EU. On the GSP+ scheme, we shall continue our dialogue to show that sustainability and moral principles are good for business.  

Much however remains to be done, we need to strengthen advocacies to ensure a level playing field and adherence to international rules and standards. As a strong WTO supporter, the EU recognises that the Philippines plays an important role in the preservation of the WTO.

 The Philippines, in the latest World Economic Report, has ranked 56th out of 149 countries in the global competitiveness report but we can do more together.  The EU is proud to be a partner of the Philippines and to collaborate to improve its business climate to attract new investments.

During the business summit, the ECCP and the EPBN have also compiled a wish list of reforms with competitiveness as the driving force to strengthen our economies. Ours is a global economic village and we have to continue to get immersed in our pursuit for connectivity as this is a key element in pushing for competitiveness.

Article was originally published on October 25, 2018 at the Philippine Star Online