The European Union and the Philippines have reached an agreement on a free-trade deal aimed at strengthening business ties and diversifying supply chains amid rising global trade tensions and changes in U.S. trade policies. The announcement was made by European Commission President Ursula von der Leyen following a conversation with Philippine President Ferdinand Marcos Jr. The deal marks the culmination of nearly three years of resumed negotiations between the two parties.

In a statement released after the leaders’ call, the European Commission emphasized the importance of cooperation among like-minded partners to ensure open, fair, and predictable trade during challenging geopolitical and geoeconomic conditions. The agreement comes in the context of heightened uncertainty over U.S. trade policies, highlighted recently by former U.S. President Donald Trump’s threats of new tariffs or trade cutoffs against the EU if it strengthens ties with Canada.

The Philippines, a key ally of the United States, is simultaneously seeking to broaden its economic and defense relationships. Last year, the EU ranked as the Philippines’ fourth-largest trading partner, accounting for 8.3 percent of the country’s total goods trade. Philippine Secretary of Trade Cristina Roque and EU Trade Chief Maros Sefcovic jointly indicated that negotiations are moving decisively toward formal completion in the coming months. Both officials have directed negotiators to finalize the agreement swiftly.

Officials from both sides have expressed confidence that the pact will enhance bilateral trade and investment by creating more diversified and resilient economic ties in an increasingly volatile global environment. They expect the trade deal to unlock new opportunities for businesses, farmers, manufacturers, and consumers, while providing clearer rules and greater predictability.

Meanwhile, Canada is also advancing free trade talks with the Philippines and the Association of Southeast Asian Nations (ASEAN). Canadian Trade Minister Mandiner Sidhu stated that negotiations with both parties are over 90 percent complete. Ottawa aims to finalize these agreements ahead of Prime Minister Mark Carney’s planned visit to Manila in November.

Speaking at the ASEAN economic ministers’ meetings in Manila, Sidhu emphasized that Canada’s efforts to deepen ties with Southeast Asia are driven by a strategy to diversify economic partnerships rather than as a direct response to changes in U.S. trade policies. He highlighted energy as Canada’s primary export offering to the region, particularly its expanding liquefied natural gas capacity.

Both the EU-Philippines and Canada-ASEAN agreements reflect broader efforts by countries in the region to strengthen economic cooperation and build resilient supply chains amid shifting geopolitical dynamics.