3 May 2004 - Secretary of Foreign Affairs Delia Domingo Albert today conveyed her congratulations to the European Union (EU) on its historic expansion as a result of the accession of 10 new member states effective 01 May 2004.

Secretary Albert cited that the enlarged EU could spell positive gains for the Philippines, in both political and economic fields.

“The Philippines considers EU expansion as a positive development in the enhancement of European regional peace and security, which, in turn, will stimulate further economic growth, not only among the new member countries but for the rest of the world as well,” Secretary Albert said.

“The enlargement brings into EU countries of Eastern and Central Europe which have been historically volatile areas,” Secretary Albert stated.  “This significantly contributes to the political stability in the region which positively impacts on the global stability.”

Secretary Albert also mentioned the economic benefits of EU enlargement.  “The expanded EU means an expanded single market for Philippine goods,” she said.

The 25-member EU will have a population of around 453 million, effectively expanding the single market for Philippine goods.  The EU is the world’s largest trader of goods, accounting for approximately 20% of global merchandise exports and imports.

Enlargement means efficiencies in the administration of trade.  Philippine exports to EU member countries encounter a single set of tariffs and a single set of trade rules and administrative procedures.

“The General System of Preferences (GSP) benefits enjoyed by Philippine products will now apply to a larger market,” the Secretary added.  The Secretary noted that tariffs in the new member states were generally higher than the ones in the EU.  With the new member states’ accession, the Philippines will benefit from a lowering of tariffs on exports to the new member states.

As a result of expected growth in their national economies, the new member states may become investors themselves in countries outside the EU.  This is already evident today, with the Czech Republic already investing in the Philippine transportation infrastructure, namely the Metro Rail Transit (MRT).  Conversely, the new member countries are also becoming attractive destinations for Philippine investment.  In 2003, Philippine container company International Container Services Inc. (ICTSI) won the bid to develop, operate and manage the Baltic container port in Gydnia, Poland.  Total investment amounted to US$400 million.

Secretary Albert said that traders will face challenges springing from the fact that they are dealing with a much larger market, such as supply capabilities.  Expansion may have short-term effects, including in labor, but in the long term, EU integration will be beneficial to all concerned.

Secretary Albert said she was not too worried about displacement of Philippine labor in the EU because as she learned from her recent trip to Europe, particularly Ireland, that Philippine health care givers are quite competitive to health-care givers coming from the new member states of the EU.

“The Philippines hopes that in building its identity, the EU will always remember to share a common destiny and to develop new ways of expressing solidarity: solidarity within an enlarged union and its new neighbors, solidarity between rich and poor regions, and solidarity between north and south in the world as a whole,” Secretary Albert stated.

Effective 01 May 2004, ten new countries became new members of the European Union, currently composed of Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, Sweden and the United Kingdom.  The new member countries are the Czech Republic, Cyprus, Estonia, Hungary, Lithuania, Latvia, Malta, Slovakia, Slovenia and Poland.

The EU is expected to further expand in 2007 with accession of Bulgaria and Romania.  New applications have been received from Croatia, Albania, the Former Yugoslav Republic of Macedonia, Bosnia-Herzegovina and Serbia-Montenegro.  END.