EU trade perk boosts PH exports to 1.7B euros

The Philippines has exported 1.7 billion euros worth of goods to the European Union (EU) last year under a trade perk that allowed zero tariff for various local products, a nearly 10-percent increase from 2015 that raised the stakes for the trade benefit, which the country might lose due to the government’s anticrime efforts.

The Generalized System of Preferences Plus (GSP +) status, a conditional trade incentive that allowed duty-free access to the European bloc, has eased the entry for more than a quarter or more than 6,000 Philippine products in 2016, a top EU official said.

Walter van Hattum, head of the economic and trade section at the EU’s delegation in Manila, told reporters that the value of local products entering the EU market went up nearly 10 percent from 1.55 billion euros in 2015.

This was based on Eurostat data, the statistical office of the EU, which said that products eligible for the GSP+ accounted for 27 percent of overall Philippine merchandise exports to the EU.

“It’s quite an increase because the overall exports from the Philippines to the world and the EU declined a bit, but the GSP+ went further up. So proportionately, that money became bigger, and what you see is a lot of agricultural products, which is roughly half of the exports or around 750 million euros,” he said.

He said that the utilization rate of the GSP+ has also improved, reaching 71 percent last year from around 66 to 67 percent in 2015.

The increased use of the GSP+ perks came at a time when the Philippine exports to the world declined by 4.4 percent to $56.23 billion last year from $58.83 billion in 2015, according to preliminary figures from the Philippine Statistics Authority.

The same trend was true for exports to the EU, which fell 5.65 percent to $6.78 billion in 2016 from $7.19 billion the year earlier.

Hattum said that local exporters have been taking advantage of the trade perk in spite of the controversies that currently hound the country’s eligibility for the GSP+.

Granted in December 2014, the GSP+ allows zero tariff for scores of local products under the condition that the Philippines would comply with 27 key international conventions, which include the respect for human rights and the abolition of the death penalty.

The EU Parliament issued a joint motion for a resolution in March that said, among others, that the EU Commission should “use all available instruments to persuade the Philippines to put an end to extrajudicial killings related to the anti-drug campaign,” including the possible removal of the GSP+ if there were no substantial improvements.

However, in spite of criticisms that the drug war had received from both local and international organizations, Hattum said that there was still an enduring business interest to take advantage of the EU market.

“For business, it’s no problem. They just need to take advantage. For them, it’s a free access to the the EU market and the whole political debate is done by the government,” he said.