Dismayed over the Senate sin tax version, the European Chamber of Commerce and Industry has warned that the country’s exports of tuna and its benefits under the Generalized System of Preferences (GSP), which grants duty-free entry of exports to Europe, would face retaliatory action saying the Senate version does not comply with the ruling of the World Trade Organization.
“There will be retaliation. If you discriminate then we just have to discriminate some of your exports under the GSP and the huge tuna exports to Europe,” ECCP vice-president Henry Schumacher told reporters at a press conference.
Schumacher noted that EU has made it very clear that under the agreed timetables, the Philippines has until March 2013 to comply with the WTO ruling to align the excise tax of the imported liquor with the local products.
The ECCP, an association representing the interests of European businessmen doing business in the Philippines, has supported the original House Bill under Rep. Emilio Abaya.
Schumacher said the first Abaya bill was amended resulting in the slashing of the government’s tax take target under this measure to P31 billion from P60 billion.
“The amended House version was no longer compliant with the WTO ruling and worse the Senate version,” he said. The Senate version has further slashed the Lower House estimated revenues to be generated from the bill to P15 billion.
“After the drama yesterday, we hope we can find a compromise so we will not violate the WTO,” he said.
Schumacher also turned the tables on the Philippines, which has sued Thailand before the WTO over discriminatory tax treatment on its cigarette exports. At present, the Philippines is closely watching Thailand’s compliance to the WTO ruling.
Aside from the regular EU-GSP privileges, Filipino exporters also expect to enjoy additional benefits with the country’s possible qualification under the EU GSP+ arrangement from the updated EU-GSP, which was recently approved by EU Parliament, allowing developing countries to enjoy longer period of duty-free or preferential tariff on their exports to the 27-nation economic bloc starting 2014 until 2023.
The GSP refers to non-reciprocal trade preferences to exports of some 155 beneficiary countries through duty-free access or lower tariffs.
The Philippines, along with ASEAN countries like Indonesia, Thailand, Vietnam, and Laos will continue to benefit from the EU GSP.
Aside from the EU GSP General benefits, the Philippines is also expected to qualify for the GSP+.
Eurostat data showed GSP utilization of the Philippines in 2011 in the following sectors: agriculture products (76.2% in 2011 from 63.9% in 2010) and industrial products (60.8% in 2011 from 62.2% in 2010).
Source: Manila Bulletin; Business Bulletin; 17 October 2012
