by Bernie Cahiles-Magkilat, MB
The Philippines committed to comply with the 27 international core conventions on human rights, labor, environment, and good governance as it sought to maintain its duty-free privilege for the country’s exports under the EU-Generalized System of Preferences+ (EU-GSP+).
Trade and Industry Assistant Secretary Allan B. Gepty, who represented the Department of Trade and Indusry during the One Country, One Voice virtual consultation on the EU-GSP+ on Wednesday, Oct. 19, made this commitment as the country is facing strong headwinds from the EU in its petition to maintain its status in the EU-GSP+ scheme.
The EU, particularly members of the EU Parliament have been very vocal in their criticism against the Philippines, particularly on alleged human rights violations, extrajudicial killings, freedom of the press, freedom of association and labor rights, red tagging, and pending bills such as the death penalty. Compliance to these are major issues in the 27 international conventions is a major criteria for a beneficiary country’s continued status for duty-free benefits of its exports.
“The enjoyment of GSP+ is anchored on the country’s compliance with the 27 international core conventions on human rights, labor, environment and good governance, and the Philippines remains committed in making good its commitments under these international conventions. Our policy direction is clear on these areas, and the Philippines can well serve as a strategic and reliable partner of the EU in the region,” said emphasized.
He reiterated that the Philippines is open to work closely with the EU (EU Commission, EU Parliament, and EU Council) to ensure compliance with international core conventions.
Gepty noted that EU is one of the major trading and investment partners of the Philippines. Through the EU GSP+ scheme, Gepty said, local stakeholders as well as foreign investors get to enjoy preferential market access in the EU market for qualified products.
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“This arrangement gives our stakeholders comparative advantage and we want to maintain this,” Gepty stressed.
Gepty cited the benefits the EU-GSP has provided to the Philippine economy via its GSP+ program since December 2014. The Philippines’ current status in the EU-GSP Plus, which grants zero duty on 6,274 tariff lines, including the country’s top major exports such as tuna, processed fruits, and garments.
The EU Commission is currently evaluating the Philippines and is expected to come up with the report for the 4th Monitoring Cycle in the fourth quarter this year. The expected report will also be used as a springboard for the new assessment when the Philippines reapplies to the new GSP+ scheme in 2024.
Gepty further emphasized that he continuation of EU GSP+ is beneficial for the Philippines and the EU in driving inclusive growth and sustainable development.
As such, he said, “issues and concerns against the Philippines must be received with utmost circumspection, clarified, and contextualized.”
With EU as a big export market and as a key investment partner, the Philippines intends to continue availing EU GSP+ to boost inclusiveness for businesses, among others. Gepty also noted that the government and the business sector are calling for the resumption of the PH-EU FTA negotiations.
In addition, Gepty said the Philippines can be the EU’s reliable and strategic partner in the Indo-Pacific region.
Philippine exports to the EU has been improving since it started enjoying the GSP+ scheme. Total Philippine exports to EU in 2015 reached 6.68 billion euros reaching a high of 7.63 billion euros in 2019, but it declined to 6.2 billion euros in 2020 due to the pandemic. The country’s exports to EU registered a strong rebound in 2021 to 7.77 billion euros.
In terms of EU-GSP+, data from the Eurostat showed that the country’s duty-free exports under the program reached 1.60 billion euros in 2015 and steadily climbed to 1.95 billion euros in 2019 before declining to 1.6 billion euros in 2020. The country’s GSP+ exports recovered hitting an all-time high of 2.03 billion euros in 2021.
Data also showed that of the country’s high utilization of the program from 68.3 percent in 2015 to 76 percent in 2021, making the Philippines 6th largest export market globally.
The GSP+ has saved 150 million euros in duty annually for Philippine exports.
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