Philippine privileges under the European Union’s (EU) Generalized Scheme of Preferences Plus (GSP+) will be extended by another four years, according to the European Union Ambassador to the Philippines Luc Veron.
“There is no decision to be had, this is just a report on the monitoring (submitted) to the legislators which are the EU Parliament and Council… There is no change, so it is extended,” Mr. Veron told reporters on the sidelines of the Pilipinas Conference on Wednesday.
He said that the EU Commission on Tuesday sent its report and monitoring to the European legislators on a number of countries that are benefiting from GSP+ including the Philippines.
“We are generally very happy with the data that we have with the Philippine government on the monitoring of the GSP+ and we hope that will continue that way,” Mr. Veron said.
The Philippines participates in the EU’s GSP+, a special incentive arrangement for low and lower middle-income countries. It grants the country zero duties on 6,274 locally made products.
The current arrangement is set to expire by end-2023. With the four-year extension, the Philippine participation in the GSP+ scheme will run through 2027.
Under the scheme, the Philippines is required to uphold commitments to 27 international conventions on human rights, labor, good governance and climate action.
A joint staff working document from the European Commission stated that it is important to provide continuity and legal certainty for GSP beneficiaries and business.
“The EU GSP’s incentive-based approach of engagement has proven successful, and it should, therefore, continue,” the EU Commission said in its report to the legislators.
“In view of the upcoming expiry of the GSP regulation at the end of 2023 and the still ongoing negotiations for a new regulation, the Commission has proposed an extension of the current rules, which was welcomed by the European Parliament and the Council,” it said.
Mr. Veron said the EU will continue with the current scheme because there was no consensus on the revisions among legislators.
“There was an ambition on the part of the legislators in the EU to revise the GSP regulation but there was no agreement [made] among legislators. So, the proposal by the European Commission was to roll over the current legislation for another four years,” he added.
“So therefore, the same rules will apply for the next four years. It’s very important [to note] that the 27 conventions that the Filipinos signed up for will form the basis of the next phase of monitoring of the situation here in the Philippines,” he added.
Department of Trade and Industry Secretary Alfredo E. Pascual said that the extension of the trading scheme will be important to Filipino businesses.
“[The extension] will maintain those who are benefiting from it, like our tuna exporters because EU has a high tariff on tuna, around 20-30%,” said Mr. Pascual in mixed English and Filipino.
“If the GSP+ is not renewed, our tuna exporters will pay the tariffs… so they will become uncompetitive from those other sources of tuna going to the EU countries,” he said.
Mr. Pascual said the DTI will encourage businesses who currently enjoy the benefits of GSP+ to expand their exports to the EU while the preferential tariff rates are still in place.
Makati Business Club Chairman Edgar O. Chua also supported the extension of the trading scheme, saying that “this one is advantageous to the country because this enables access to the market.”
Meanwhile, Mr. Veron said that the Philippines and the European Union are on track to complete the preliminary phase of a free trade agreement (FTA) by the end of this year.
“The European Commission has a mandate to negotiate an FTA with the Philippines… However, negotiations have been suspended in 2017, for various reasons,” he said.
Mr. Veron said that what is taking place now is that both countries are looking up different chapters that would form part of the FTA.
“If we want a very efficient negotiation, we need to know on which chapter we are going to negotiate and basically what is visible and what is less visible, so as to determine the level of ambition of our FTA,” Mr. Veron said.
The EU and the Philippines first launched negotiations for an FTA in 2015, but these have been stalled since 2017. Negotiations were put on hold due to issues on intellectual property rights and data exclusivity, among others.
In August, President Ferdinand R. Marcos, Jr. and European Commission President Ursula von der Leyen announced both sides are exploring the resumption of negotiations for an FTA.