EU FTA queried over data sovereignty issues

THE digital chapter of the Philippines’ proposed free trade agreement (FTA) with the European Union (EU) has raised questions about Philippines’ ability to regulate cross-border data flows and pursue data localization policies.

“The agreement risks locking the country into long-term digital dependency while undermining the Philippines’ ability to develop its own digital economy and regulate powerful global technology corporations,” a trade justice advocacy and a labor group said in a joint position paper submitted to the Department of Trade and Industry.

Trade Justice Pilipinas and Sentro ng mga Nagkakaisa at Progresibong Manggagawa  said the agreement prioritizes the interests of multinational technology companies instead of workers’ rights, democratic governance, industrial development, and national digital sovereignty.

“The digital trade chapter demanded by the European Union risks permanently carving out major parts of the digital economy from future democratic oversight, including future Freedom of Information laws and transparency regimes,” they said.

They noted the agreement’s strong protections for source code, proprietary software, and unrestricted cross-border operations would make it hard for regulators to oversee.

They cited the importance of public access to information as artificial intelligence systems, algorithms, and digital platforms shape hiring, scheduling, wages, surveillance, and dismissal.

Citing the EU’s proposed text for the digital chapter, the groups said that the “right to regulate” provision is “largely declaratory” and does not mention labor protections.

The groups also criticized the provision that ensures cross-border data flows to ensure trade in the digital economy, noting that it limits the Philippines’ ability to regulate how data is stored, processed and transferred.

“By discouraging data localization requirements and restrictions on offshore data processing, the agreement reduced to country’s policy space to build its own digital infrastructure and pursue long-term industrial strategies,” it said.

They noted that the Philippines may be limited to supplying labor, raw data and consumers for global platforms “while technological ownership, infrastructure and profits are concentrated elsewhere.”

They also raised concerns over ambiguities within the agreement, which could expose the Philippines to legal challenge under investor-state dispute settlement mechanisms.

“At a time when countries around the world are debating how to regulate artificial intelligence, tax digital corporations, and build sovereign digital infrastructure, the Philippines should not lock itself into rules that restrict future democratic policymaking,” they said.

The Philippines and EU in May conducted their sixth round of negotiations for the proposed FTA, which seeks to facilitate wider market access and improve bilateral trade conditions.

In particular, the digital chapter seeks to promote cross-border digital commerce, establish legal certainty for businesses, and protect consumers in the online environment.

Trade Secretary Ma. Cristina A. Roque said the Philippines is looking to complete negotiations for an EU FTA either this month or in July.

The EU was the Philippines’ fifth-largest trading partner last year, with trade valued at $18.10 billion in 2025. — Beatriz Marie D. Cruz