The Philippines expects to increase exports to the European Union by 35 percent and provide jobs for 200,000 after the European Parliament approved the Philippine application for Generalized System of Preferences Plus (GSP+) last Thursday.
GSP+ allows zero tariff for 6,274 products, including tuna, that may be exported to Europe. Zero tariff will cover almost two-thirds of Philippine exports to the union. An earlier study done by the Department of Trade showed that the expanded GSP will mean additional exports of +600 million during the first year of its implementation which starts Dec. 25, from the current export of +1.69 billion.
The expanded GSP also makes the Philippines more attractive for foreigners to invest in the countryside and speed up recovery efforts for disaster-stricken areas.
The Philippines is already a beneficiary of the EU’s Regular GSP arrangement.
The Philippines total exports to the EU that were eligible under regular GSP in 2013 amounted to +1.69 billion or 33 percent of total exports to the EU. Actual utilization was around 64 percent or +1.08 billion but this figure is set to rise as a result of GSP+.
The best accommodations (from Regular GSP to GSP+) were given to prepared foodstuffs (9.3%), garments (9.0%), textile products (5.0%), live animals and animal products (4.2%), and footwear, headwear and umbrellas (4.0 percent).
“This is a game changer , hundreds of thousands of jobs will be available in the countryside. This will specifically help disaster- stricken areas. The approval of the EU Parliament reflects the EU’s strong support to the Philippines’ development strategy and recovery efforts,” Trade and Industry Secretary Gregory Domingo said during the press briefing Friday.
Domingo added that a critical element of the country’s inclusive growth strategy is boosting trade with the rest of the world to help people living in areas affected by Typhoon Haiyan (Yolanda)
DTI Undersecretary and Lead Trade Negotiator Adrian Cristobal said “With the GSP+ in place, our exporters will have better access and comparative advantage in the EU market”.
In Asean, the Philippines is the only beneficiary country of the EU GSP+ program. “We expect foreign investors to turn their attention to the Philippines and consider the country as their manufacturing hub for the Asean region,” Cristobal added.
To ensure that the GSP+ benefits will be maximized, the DTI will roll out nationwide campaign for industries to avail of the GSP+ tariff privileges. This includes technical assistance and capacity building for Philippine exporters to Europe, through the EU’s Trade Related Technical Assistance (TRTA) Project.
“We need to work closely with relevant government agencies for the EU monitoring process concerning the implementation of 27 core international conventions in the fields of human and labor rights, the environment and good governance. The monitoring process is an essential requirement of the EU GSP+ program and is conducted every two years,” Cristobal said.
EU Ambassador Guy Ledoux said that, “This is very good news for the Philippines as it will bring tariffs to 0% for two thirds of tariff lines including strategic products that the Philippines is already exporting to the EU. This will immediately translate into savings of tens of millions of euros per year in foregone customs duties.”
“Apart 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 bottom line is more jobs for Filipinos in the Philippines”, Ambassador Ledoux said.
The Philippines is the 14th country to be included in the list of EU GSP+ beneficiaries along with Armenia, Bolivia. Cape Verde, Costa Rica, Ecuador, El Salvador, Georgia, Guatemala, Mongolia, Pakistan, Panama, Paraguay and Peru.