The European Union is prioritizing the implementation of the Generalized Scheme of Preferences Plus (GSP+), along with respect for human and labor rights, as a priority in trade relations with the Philippines.
Speaking at the European Philippine Business Summit, EU Ambassador to the Philippines Luc Veron said the GSP+ is an important competitive advantage for the Philippines since it is the only country in Southeast Asia enjoying that trade preference.
The GSP+ allows 6,274 products from the Philippines to enter the EU at zero tariff.
However, as GSP+ beneficiary countries have to implement international conventions related to human rights, labor rights, environmental protection and good governance, the EU has earlier raised concerns on the human rights situation in the Philippines including crimes in relation to the war on drugs.
Aside from concerns from the EU regarding compliance with international conventions, the Philippines still has a lot of work to do as the GSP+ benefits are not fully maximized. Veron said the country is still far from its potential and even lags behind its neighbors who do not enjoy the same advantage.
Trade between the EU and Vietnam is three times higher, while trade between the EU and Thailand is 2.5 times bigger than EU-Philippines trade. Furthermore, trade between the EU and Philippines declined 17 percent last year from 15 billion euros in 2019.
Veron is counting on ongoing policy reforms that when fully implemented, would benefit businesses. The EU in particular, is hoping proposed tax reforms and proposals to amend the Public Service Act and Retail Trade Liberalization Act would be passed. It is also waiting for the full implementation of the Customs Modernization Act, Ease of Doing Business, and the Corporate Recovery and Tax Incentives for Enterprises Act.
Trade Undersecretary Ceferino Rodolfo said the Philippines continues to engage with the EU in the monitoring of the country’s compliance to the EU GSP+ but based on the figures presented, we still have a long way to go before we can maximize its potential. If we give it the same priority as the Europeans are giving it, Filipino businesses would surely benefit from the increased trade opportunities that would benefit our economy that is still struggling to recover from the impact of the COVID-19 pandemic.
Let’s hope our government is committed to doing what is necessary so the Philippines can keep this trade advantage intact as we find the ways and means towards the road to recovery.*
