Possible removal of GSP+ to hurt Philippine exports

CEBU, Philippines - An export official warned yesterday on the negative impact of the possible loss of the Generalized System of Preferences Plus to Philippine exports as worries rise that the European Union may remove the status amid the government's extraordinary fight against crime and illegal drugs.

Philippine Exporters Confederation of the Philippines (Philexport) Cebu Executive Director Fred Escalona told The FREEMAN yesterday that the effect of the possible removal of the GSP+ status is "big" to Philippine exports should the EU decide to do so.

The GSP+ has allowed the tariff-free access of over 6,000 products to the EU market.

"Yes, [it's] big effect because our exports to the EU has been increasing by double digit rates," Escalona said.

The Philexport official explained that if the country no longer enjoys the preferential trade arrangement, Philippine exports to the EU that are currently enjoying only 0-5 percent tariff will no longer be attractive to European buyers.

"It is true that one of the conditions imposed by the EU on GSP+ privileges is respect for human rights. But violations are difficult to prove though," Escalona further said.

"If human rights violations are proven to be true then it is definite that we will also lose our GSP+ privileges," he further added.

There have been worries that the country's GSP+ status may be at risk amid attempts to bring back death penalty in the Philippines and the government's extraordinary measures to fights illegal drugs and crime.

Part of the conditions set by EU for the GSP+, which was granted to the Philippines in December 2014, is for the country to adhere to 27 international conventions on human and labor rights, environmental protection, and good governance, among others.

Earlier reports said that an EU monitoring team is due in the country this month to monitor the country's compliance with GSP+ requirements.

If in case the country loses its GSP+ status, it would still have its GSP regular, which covers a total of 6,209 Philippine products, 2,442 of which are subject to zero duty while 3,767 have reduced tariffs.

GSP+, on the oher hand, grants 6,274 other products zero duty. Before the GSP+ was granted, the Philippines was only covered by the regular EU-GSP which provides zero duty to only 2,442 products and reduced tariffs for 3,767 products.

The country's beneficiary status under the GSP+ necessitates the implementation of the 27 international treaties and conventions on human rights, labor rights, environment and governance.

The EU-GSP+ program is deemed an essential achievement of the Philippines' strategy to sustain and nurture trade and investment relations with Europe.

Earlier reports quoted Department of Trade and Industry Secretary Ramon M. Lopez as saying that the GSP+ status could be sacrificed if the country actually pushes for bringing back capital punishment. — Carlo S. Lorenciana    (Freeman News)