Chinese investors are urged to make the Philippines their manufacturing hub for better access to the markets of European Union (EU) and the United States (US).
During a China-Philippines Business Opportunities Matching Conference here last Friday, Trade Undersecretary Ceferino Rodolfo told the business delegation from Dezhou City of Shandong Province that the Philippines benefits from the preferential tariff systems from EU and the US, which makes the country more competitive to export to these markets.
Rodolfo said Chinese businesses can take advantage of better tariff in the Philippines in exporting to EU and the US than exporting from China.
This is because a number of Chinese products are facing trade remedies in the EU, while the Trump administration is pursuing trade measure that would affect China and other countries which the US has USD10-billion trade deficit.
With the Generalised Scheme of Preferences Plus (GSP+) granted by EU to the Philippines in 2014, some 6,274 products from the country can enter the EU market duty-free.
For instance, bicycles, solar panels, and leather goods made in the Philippines exported to the EU have zero tariff.
However, the same products coming from China enter the EU market at most favored nation (MFN) rate of 14 percent for bicycles, 2.7 percent for solar panels, and 2.5 percent for leather.
But with the anti-dumping trade measure faced by China, the same products entering the EU will be slapped with higher tariffs at 48.5 percent for bicycles, 44.7 percent for solar panels, and 58.9 percent for leather.
Moreover, China is among the countries that will be affected as US President Donald Trump is pursuing trade measures to nations which the US has USD10-billion deficit.
Included in the list of countries which the US has trade deficit are Canada, China, India, Japan, Mexico, South Korea, Switzerland, Taiwan as well as the EU. Also included in the list are Southeast Asian countries such as Indonesia, Malaysia, Thailand, and Vietnam.
Rodolfo noted that aside from the country is not targeted by the planned trade measures by the US government, the Philippines started to enjoy the expanded Generalized System of Preferences (GSP) last July 1.
This is after the US Trade Representative (USTR) approved the Philippine government’s petition to expand the GSP extending the coverage to 23 new tariff lines including travel goods such as apparels, bags, wallets, backpacks, luggage, and sport and travel bags.
This expands products made in the Philippines entering the US market duty-free up to 80 percent from 70 percent.
The trade official stressed that Chinese manufacturers exporting to US will be more competitive than making the products in other neighboring countries.
“Because if you invest in the Philippines, you are not just investing to take advantage of the fastest growing economy in the world, but more importantly you are investing so that to take advantage of the other countries in which the Philippines is an integral part of,” Rodolfo said.