THE European Chamber of Commerce of the Philippines (ECCP) said the proposed extension of the European Union’s Generalized Scheme of Preferences Plus (GSP+) will continue to provide opportunities for Philippine exporters.
In a statement on Thursday, the ECCP said it “welcomes the proposal of the European Commission to extend the EU GSP+ grant to the Philippines.”
“The Philippines has indeed greatly benefited from such a scheme. With a 77% utilization rate, 2.93 billion euros worth of Philippine products were exported to the EU using GSP+ last year based on the data of the Philippines Department of Trade and Industry (DTI),” the ECCP added.
George T. Barcelon, Philippine Chamber of Commerce and Industry (PCCI) president, added in a Viber message that the proposed extension would be a “great help” to exporters.
“This allows more than 6,000+ of items to enter Europe with reduced duties,” Mr. Barcelon said.
Sergio R. Ortiz-Luis, Jr., Philippine Exporters Confederation, Inc. (PHILEXPORT) president, said via phone that the extension is “good news” for exporters.
“The benefits (of GSP+ status) will be sustained. I don’t think there will be additional protocols that are needed (for approval) since it is only an extension,” Mr. Ortiz-Luis said.
In a memorandum on July 4, the EC proposed to extend the validity of the preferential trade scheme until Dec. 31, 2027. The proposal is awaiting the approval of the European Parliament and the European Council.
The current scheme is set to expire at the end of 2023.
GSP+ is targeted at low and lower middle-income countries. In exchange, participants are required to uphold commitments to 27 international conventions on human rights, labor, good governance and climate action.
GSP+ grants the Philippines zero tariffs on 6,274 products or 66% of all EU tariff lines. Its top exports to the EU include crude coconut oil, tuna, pineapple, and other agricultural products.
In 2022, 2.93 billion euros worth of Philippine products were exported to the EU using the GSP+ scheme, equivalent to a 77% utilization rate, according to government data.
The ECCP said that even with the GSP+ extension, the proposed free trade agreement (FTA) between the Philippines and the EU should take priority.
“The ECCP wishes to underscore the urgency and importance of a timely and successful conclusion of the EU-Philippines FTA. This can and will lead to improved trade and investment opportunities, ultimately resulting in economic diversification, increased market competitiveness and openness, better employment prospects, and innovation and technological advancements,” it said.
“Such a deal would also help contribute towards achieving a greener, more inclusive, and sustainable Philippines,” it added.
The Trade department has been pushing for the resumption of FTA negotiations if the Philippines is rendered ineligible for GSP+ if it hits upper-middle income status by 2024 or 2025, as per government projections.
The last round of negotiations for the proposed FTA between the Philippines and EU was conducted in 2017. Discussions officially started in 2016.
The ECCP said the European business community in the Philippines wants negotiations to resume, citing the results of a survey conducted in the first half of 2023 taking in input from about 200 respondents.
The resumption of FTA negotiations was backed by 80% of respondents while 81% consider the conclusion of talks to be of “significant importance” to their business strategy.
The survey also revealed that about 83% expect an FTA to be heavily utilized.
“Sourcing location as well as priority end markets were identified as the key factors for the development of an FTA optimization strategy of the respondents’ respective firms,” the survey indicated.
In close partnership with government, businesses, civil society, and academia, ECCP passionately works to enhance the business environment for both European and Filipino companies.