Trade Secretary Fred Pascual pushed for the renewal of preferential tariff enjoyed by Filipino exporters under the European Union’s Generalized Scheme of Preferences Plus.
GSP+ is an incentive arrangement that grants the Philippines zero tariffs on 6,274 products or 66 percent of all EU tariff lines. This preferential trade is maintained, while the country upholds its commitments under the GSP+ select 27 international conventions on human rights, labor, good governance and environment.
Pascual delivered a strong message of commitment to the EU-PH partnership in trade and investment before the EU Parliament Committee on International Trade on Oct. 27. He presented in the European Parliament in Brussels during the critical stage of the monitoring process for the renewal of the Philippines GSP+ preferential status.
Manifesting willingness to work closely with the EU, Pascual underscored EU-GSP+ support in improving bilateral relations and socio-economic development in the Philippines and the policies and programs of the Marcos administration that reaffirms the country’s compliance with international conventions.
“The Philippines is an attractive investment destination given its solid macroeconomic fundamentals, enabling policy environment and young and trainable workforce. With a stable and predictable political regime, our country is well-positioned in the Indo-Pacific to become a regional hub for manufacturing, innovation, training, and education,” he said.
The trade chief recognized the EU as one of its top partners in trade and investment, attributing the EU-GSP+ as an enabling factor to attain this.
He said that since the Philippines’ successful application to the GSP+ in 2014, the country had benefited from increased market access to the EU.
Philippine exports to the EU climbed from 5.3 billion euros in 2014 under the standard GSP to 7.77 billion euros in 2021. The Philippines also recorded its highest utilization rate at 76 percent of total eligible exports, including tuna, processed fruits and spectacle lenses last year.
The GSP+ also benefited EU companies, as they invested in manufacturing facilities in the Philippines to take advantage of the country’s extensive and expanding domestic market and its network of free trade agreements, which includes those with ASEAN. They also gained from relatively lower cost of raw materials.
Pascual identified significant developments in the Philippine landscape including change in government leadership, transition to a preventive and rehabilitative anti-illegal drugs campaign, assurance of press freedom,and a vow to combat climate change. He said these indicated that the country was set on pursuing good governance and building back better.
“Given the foregoing and the values and principles we share, the Philippines remains interested and therefore ready to work toward the resumption of negotiations of the Philippine-EU Free Trade Agreement. A 2020 study shows that 83 percent of German companies want to resume the FTA negotiations, citing huge potential for EU companies, with the FTA positively affecting competitiveness,” he said.