Philippine bid for GSP+ list inclusion backed
The European Commission has endorsed the Philippines’ bid to avail itself of the more generous preferential tariff scheme offered by the 28-member bloc under the Generalized System of Preferences (GSP) or GSP+, according to Philippine Exporters Confederation Inc.
Walter van Hattum, head of the economic and trade section of the European Union delegation to the Philippines, was quoted in the Philexport statement as saying that the commission had adopted on Aug. 20 its decision regarding the country’s GSP+ application.
Following the commission’s endorsement, the European Parliament and Council are given two months to review and deliberate the Philippines’ GSP+ application, which could be further extended by another two months, Hattum said.
“This means that the final outcome of granting GSP+ to the Philippines will be known on Dec. 20, 2014. It will be effective the day following the publication of the decision in the EU Official Journal,” Hattum said.
The European Commission’s endorsement allowed the Philippines to pass the first hurdle to the country’s bid for inclusion in the list of countries eligible for zero duty for more than 6,000 tariff lines.
Securing approval for the GSP+ program forms part of the Philippine government’s strategy to further boost bilateral trade with the 28 member states of the European Union.
The approval of the country’s application for EU GSP+ is expected to increase Philippine exports to the EU by as much as 611 million euros or about P38 billion a year.
The expanded scheme will eliminate duties on 61 percent of the Philippine products eligible under the general GSP.
The GSP+, which took effect in January 2014, offered a more generous scheme of preferences and a larger coverage of 6,274 products, all of which are subject to zero duty.
The previous GSP program covered only 6,209 tariff lines, of which only 2,442 lines could be exported at zero duties.
Based on earlier projections, the products expected to benefit the most from the GSP+ are animal or vegetable fats and oils (231.2 million euros); prepared foodstuffs (151.2 million euros); textiles and garments (79.7 million euros); footwear, headwear, umbrellas (28.5 million euros); and chemical products (17.1 million euros).
These projections are also expected to translate to 267,587 additional jobs both in the agriculture and manufacturing sector.
In the same statement, the Foreign Buyers Association of the Philippines (Fobap) said it was expecting an initial 15-percent increase in the volume of exports to the EU countries with the granting of GSP+ to the Philippines.
“There will definitely be 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+,” said Fobap president Robert Young.
Young was quoted as saying that some factories would be expanding their operations by 20 to 40 percent to accommodate the projected increased 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,” he added.
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