FTA negotiations between EU and the Philippines aim at eliminating or reducing tariff and non-tariff barriers to trade in agricultural products, manufactured goods and services and thereby facilitating trade flows, realizing the untapped potential and expanding foreign direct investment and leveling the playing field between private businesses and state owned enterprises.
Negotiations for an EU - Philippines FTA were launched in December 2015 seeking to build upon the Partnership and Cooperation Agreement signed between both partners in 2012 and ratified in January 2018.

There is potential scope for the EU - Philippines FTA to promote increases in bilateral trade in automotive products. Reduction or removal of tariffs on EU imports entering the Philippines would, in particular, improve competitiveness vis - à - vis Japan, Korea, China and Asean members that currently enjoy preferential market access, stimulating exports of passenger and commercial vehicles and parts and components.

In turn, the Philippines stands to benefit from potential increases in EU investment in the domestic automotive industry.

EU investments by larger automotive manufacturing enterprises could produce notable benefits to the Philippines by helping to facilitate the establishment of automotive manufacturing ecosystems or clusters. This, in turn, has implications for allied upstream industries that serve the sector, such as steel and chemicals.