Extension of GSP+, free trade agreement with the EU in sight
MANILA – A trade official is pushing for the extension of the European Union (EU) trade preferences program while pursuing a possible free trade agreement (FTA) with the bloc to strengthen bilateral trade relations.
Angelo Salvador Benedictos, director of the DTI-Bureau of International Trade Relations, said he wanted the renewal of the EU’s Generalized Scheme of Preferences Plus (GSP+) because “it benefits many industries, many parts of the Philippines “.
The EU’s current GSP+ scheme, which allows duty-free entry of 6,274 Philippine products into Europe, will expire by the end of 2023, according to a press release on Saturday.
“So we take advantage of it, we use it. It’s good for us and it’s good for Europe. And in the short term we need to be able to renew and expand, and in the long term please let us think of a better way to trade between Europe and the Philippines and than we could think of to the FTA that we discussed,” he said during a recent webinar.
Benedictos said there were already two rounds of FTA negotiations between the Philippines and the EU.
According to the BITR-Bilateral Relations Division, the Philippines’ strategic objectives in the EU’s engagement in an FTA include obtaining additional duty-free market access beyond those covered by the GSP+ scheme. and on a permanent basis; provide an enabling framework to attract more EU investment; and be on par with other ASEAN member states actively pursuing FTAs with the EU.
Kristiyana Kalcheva, policy officer for bilateral relations in trade and sustainable development and EU GSP at the European Commission’s Directorate-General for Trade, said the current GSP regulation will expire on December 31, 2023, the EC made a proposal on September 22. last year for a new regulation, which the European Parliament and the Council are currently discussing.
“The aim is to have the new GSP regulations adopted by 2022, with application from January 1, 2024, to ensure predictability and a smooth transition,” she said.
Kalcheva said an important aspect is the Commission’s proposal to GSP+ beneficiaries to re-apply for the scheme.
“Indeed, there are new conditions such as covenants and also an element that involves an action plan for the implementation of covenants, so a new application is the best way to ensure that beneficiaries meet the proposed new requirements for entering GSP+,” she added.
Meanwhile, the country is again urged to increase the use of EU GSP+ usage.
Luc Veron, EU Ambassador and Head of the EU Delegation to the Philippines, said the country’s utilization rate of EU GSP+ preferences reached 75% in 2020.
“Over the past two years, when the economic system and international trade have faced many challenges due to the pandemic, we have seen the usefulness of GSP+ in supporting all trade in goods between the EU and the Philippines. This is why the EU works closely with its partner, the Philippines, and this is to ensure that potential trade benefits are maximized. Of course, if we work together, we can increase the utilization rate even closer to 100% and increase the overall value of Philippine exports to the EU,” he said.
Veron said agricultural products, including processed foods, fish products and manufactured goods, benefited greatly from GSP+.
In a separate interview, Sergio Ortiz-Luis Jr., President of the Philippine Exporters Confederation, Inc. (Philexport) said that at least 500 of their members actively export to the European Union.
“The extension of the EU’s GSP+ and an EU FTA will bode well for the development and growth of this supply chain and real export performance,” he said. “We just need to address issues such as high shipping costs and raw material availability for more finished products to qualify.” (PR)