The country’s biggest group of exporters downplayed the contribution of the EU Generalized System of Preferences Plus, or GDP+, to the recovery of Philippine exports.
The Philippine Confederation of Exporters claimed the removal of the GSP+ as a trade privilege would not impact greatly on Philippine shipments to Europe.
“That’s nothing fatal. Some European say we’ll lose 60 percent of our exports, that’s not true. What the government is saying is that our exports to Europe is 23 percent of the total exports. My estimate is that we’ll lose some but we may be able to retain at least 10 percent,” said association president Sergio Ortiz-Luis.
He noted that the EU Commission had been vocal about the state of human rights in the Philippines, specifically on extrajudicial killings, and labor conditions as well.
The EU should not use human rights and labor issues as conditions for the retention of the GSP+, he said.
The group said the Philippines could give up the 23 percent contribution EU GSP+ exports to Philippine shipments, valued at nearly $200 million, if the privilege was tied to human rights issues.
“We are not trying to be better than them or others. But they should not use that scheme to meddle with internal affairs. It will be costly for us to always mind their protocols. I’d rather that we keep our pride as a country if the losses will amount to that only,” Ortiz-Luiz said.
He said not all exportera benefited from over 6,200 tariff lines under the trade scheme. Garments is a good export product, he said, but the Philippines has very limited exports of the product.
The Philippines’ EU GSP+ utilization rate increased from 71 percent in 2016 to over 91 percent in the first half of 2017. Out of €6.6 billion total exports to the EU, €1.7 billion enjoyed GSP+.
The GSP+ program allows beneficiary countries to export specific products to the EU duty free. GSP+ gives zero tariff to 6,247 product lines entering the EU market.
EU is the fourth largest export market of the Philippines with over €6 billion worth shipments. Exports to the EU year-on-year rose 36 percent in the first two quarters of 2017.
Philippine exports had been down in the last 24 months and rebounded to positive only in the last few months of 2016.
The Department of Trade and Industry, meanwhile, is confident it will pass the annual review of the EU GSP+ that will allow to country to retain if not expand the current benefits the Philippines enjoys under trade arrangement.
Trade Secretary Ramon Lopez earlier said the EU asked the Philippines to provide new data and information that would strengthen Manila’s position as a beneficiary.
“That will be part of the review that will happen on October to December. They will assess how well the beneficiary countries are using the scheme and the impact it has on the economy,” he said.
“We will also present to them how the scheme is beneficial to EU consumers and to investors in the Philippines that export back to Europe, the US and Asia,” he added.
The EU parliament will decide if the Philippines had been consciously adhering to international agreements on labor, human rights and the anti-drugs campaign.