PHL bags enhanced Europe trade perk

January 7, 2015 at 17:13

Posted on December 19, 2014 12:06:00 AM


By Raymund Luther B. AquinoReporter

EXPANDED trade is in the offing for the Philippines and the European Union (EU), as heralded yesterday by the European Parliament’s vote to approve the country’s participation in the EU’s Generalized Scheme of Preferences Plus (GSP+) tariff waiver program.


 “In its plenary meeting today, the European Parliament completed the last stage in the process to grant the Philippines GSP+ that will provide duty-free entry to the EU for some of the most important Philippine exports, including processed fruit and foodstuffs; coconut oil; footwear; fish and textiles,” the EU Delegation to the Philippines said in a statement.Details of the vote, which took place on Thursday evening Manila time, were not immediately available as of press time.

“This is very good news for the Philippines as it will bring tariffs to 0% for two-thirds of tariff lines (product types), including strategic products that the Philippines is already exporting to the EU,” EU Ambassador Guy Ledoux said in the statement. “This will immediately translate into savings of tens of millions of euros per year in foregone customs duties.”

Being accorded privileges under GSP+ was contingent on the country’s ratification of 27 core international conventions on human and labor rights, environmental protection and good governance and their effective implementation, the Delegation’s statement noted.

Mr. Ledoux touted that fact that “[a]part from giving a dramatic and immediate advantage to Philippine exports, the EU concession significantly improves the attractiveness of the Philippines as a destination for new agricultural and manufacturing facilities for products that will now enjoy duty-free access to the EU.”

“This gives the Philippines a comparative advantage and represents very tangible EU support to the Philippine strategy to increase exports and investments, and diversify its industry,” the envoy explained.

Walter Van Hattum, head for economic cooperation at the EU Delegation to the Philippines, had said last week that he expected Philippine participation in GSP+ to “be effective very early 2015 — basically, first week of January.”

The Philippines is already a beneficiary of the regular GSP scheme. The EU Delegation noted in its statement that value of exports to the EU qualified under GSP last year totaled €1.69 billion, or 33% of all Philippine exports to the EU. Philippines’ actual utilization of GSP stood at around 64% or €1.08 billion, the Delegation noted, but said “this figure is set to rise as a result of GSP+.”

“The greatest benefit that is likely to be gained from GSP+ is the attraction of new industrial investments in sectors where relatively high tariffs are being slashed to zero under GSP+,” the Delegation said. “These include established Filipino exports that are labor-intensive such as pineapple juice (currently 28.5% [tariffs]); garments (currently 5-9%); preserved fruits (currently 6-9%); tuna (currently 20.5%); fruit jams and jellies (currently 20.5%) and footwear (currently 11.9%).”

A GSP+ brief provided by the Department of Trade and Industry last week showed that the regular GSP covers a total of 6,209 products, 2,442 of which are subject to zero duty while 3,767 are subject to reduced tariffs. In contrast, GSP+ has a larger coverage of 6,274 products, all of which will be accorded zero duty.

The same fact sheet showed that Philippine exports under GSP+ are estimated to increase by €611.8 million in the first year of availment. The department added that this projected increase will translate to 267,587 jobs generated in both the agriculture and manufacturing sectors, many of which will be in rural areas.

The same document showed that under the regular GSP, major exports of the Philippines to the EU are: crude coconut oil, canned tuna, pneumatic tires, spectacle lenses, relays, preserved fruits, board and similar cabinets for electric control or the distribution of electricity, and ballasts for discharge lamps.

The EU was the Philippines’ fourth-largest trading partner last year after Japan, China and the United States, according to data of the Philippine Statistics Authority.

Philippine-EU trade grew 9% annually to €10.8 billion in 2013, while EU-Southeast Asia trade fell 2% to €179 billion, EU data show.

There are 13 other GSP+ beneficiaries, namely: Armenia, Bolivia, Cape Verde, Costa Rica, Ecuador, El Salvador, Georgia, Guatemala, Mongolia, Pakistan, Panama, Paraguay and Peru.

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