Zero-tariff exports to EU a Christmas gift for PH traders

MANILA, Philippines – Filipino exporters can call it a Christmas present.

A 10-year trade scheme which grants Philippine exporters zero tariff in shipping at least 6,274 products to the European Union (EU) is set for implementation on Thursday, December 25.

The Philippines, which has been included in EU’s Generalized System of Preferences Plus (GSP+), is seen to rake an additional 600 million euros ($733.76 million*) worth of additional exports, said Trade Secretary Gregory Domingo.

“This welcome development will bring in more foreign investments in the textiles, garments, footwear, and processed foods sectors, thus strengthening our positioning as a manufacturing hub in Southeast Asia," Domingo told a press conference on Friday, December 19.

Growth prospects of the trading scheme would also generate over 267,000 new jobs, said Domingo.

These jobs will come from the agriculture and manufacturing sectors in rural areas, he said.

GSP+ evolved from EU’s Generalized System of Preferences (GSP). The GSP had less covered products: 2,442 enjoyed zero tariff, while 3,767 are subjected to reduced fees.

Domingo said animal or vegetable fats and oils, prepared foodstuff, textiles and garments, footwear, headwear, umbrellas, and chemical products are among the product sectors that will most likely benefit from the GSP+ scheme.

Marites Agoncillo, president of the Confederation of Garments Exporters of the Philippines, expects to see 79.7 million euros ($97.47 million) worth of garment exports.

The Philippines shipped a total of $6.6254 billion of export products to EU member countries in 2013, according to the Philippine Statistics Authority. The amount represent EU’s 11.6% share of the country’s total exports receipts. 

That figure, including the previous GSP utilization rate of a low 63.5%, poses a challenge to exporters, said Trade Undersecretary Adrian Cristobal Jr.

"We want to increase that under the GSP Plus. We have to identify what products we are competitive," he said.

According to Cristobal, several competitiveness issues still haunt exporters. These include sanitary and phytosanitary standards, technical procedures, rules of origin, and other standards EU economies have set. 

Through EU’s Trade Related Technical Assistance Project, the Department of Trade and Industry said it has rolled out its campaign nationwide for industries to take advantage of GSP’s tariff privileges. – Rappler.com

*$1=P44.78