European Commission backs Phl bid to access EU GSP

MANILA, Philippines - The European Commission has favorably endorsed the Philippines’ application for a scheme that would allow more goods to enter the European Union (EU) at zero duty.

According to the Philippine Exporters Confederation Inc., the country expects greater access for exports – particularly textile and garments, processed fruits, fisheries and bicycle – in the EU next year under the Generalized Scheme of Preferences Plus (GSP+) after the European Commission positively endorsed the country’s application to the EU Parliament and Council.

“On Aug. 20, the European Commission adopted its decision regarding granting GSP+ to the Philippines,” Walter van Hattum, head of the economic and trade section of the EU delegation to the Philippines was quoted as saying.

With the endorsement, the European Parliament and Council have two months to decide, extendable by another two months,  on the country’s GSP+ application.

“This means that the final outcome of granting GSP+ to the Philippines will be known on Dec. 20, 2014 latest. It will be effective the day following publication of the decision in the EU Official Journal,” Hattum said.

If the Philippines qualifies for EU GSP+ status, the country’s exports to the region are expected to rise as more products would be allowed to enter the bloc at zero duty.

At present, the Philippines is a beneficiary of the regular GSP, which covers 6,209 products, with 2,442 products subject to zero duty and the rest slapped with lower tariffs.

The EU GSP+ covers 6,274 products which could enter the EU at zero duty.

Initial estimates from the Department of Trade and Industry show the GSP+ could increase Philippine exports to the EU by 611.8 million euros, representing an 11.96 percent increase from the country’s outbound shipments to the bloc in 2012.

For its part, the Foreign Buyers Association of the Philippines (FOBAP) said it expects an initial 15-percent increase in volume of exports to the EU when the Philippines gets GSP+ status.

“There will be definitely (an) increase in the trade in Manila because most of the European buyers will be either increasing their orders or there will be new EU buyers that will be coming to the Philippines to explore the goods that are covered by the EU GSP+,” FOBAP president Robert Young said.

The group expects factories to expand operations by 20 to 40 percent to accommodate the projected increase in export orders.

“We will be purchasing more raw materials for processing the goods that they have ordered. And also, we will be busy with product development so we can present more products which will enter into the duty-free category,” Young said.