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Deal or no deal, Brexit will not affect PH

The Philippines will keep the same market access it has with the United Kingdom regardless if Brexit ends with a deal or not, the country’s trade chief insisted on Friday.

Trade and Industry Secretary Ramon Lopez said that the Philippines would not feel any significant impact post-Brexit, citing a commitment he said the Philippines recently secured from the UK.

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The statement sought to downplay the implications of a study recently released by the United Nations Conference on Trade and Development (Unctad), which essentially said that developing countries might find themselves in the losing end.

A no-deal Brexit, according to the study, would mean that preferential trade agreements would no longer apply and be replaced instead by most favored nation (MFN) rates.

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Preferential deals give countries easier access to markets such as by granting them tariff-free entry. MFN rates, meanwhile, could mean higher tariffs since these apply to countries outside of preferential deals.

This could result in a $92 million potential loss in export revenues for the Philippines, which account for 13 percent of the country’s exports to the UK, the study said.

The Department of Trade and Industry (DTI), however, said that the study did not take into account ongoing bilateral talks wherein the Philippines was assured of retaining its current level of market access to the UK.

Through the European Union (EU), some exports from the Philippines could enter the UK market tariff free.

In 2017, 35 percent of total Philippine exports had tariff-free access to the UK, accounting for less than 10 percent of total Philippine exports to the EU bloc, DTI said.

This was made possible through the EU Generalised Scheme of Preferences Plus (EU-GSP+), which has allowed the Philippines to export more than 6,000 products to the EU at zero tariff for the past few years.

DTI said that recent high-level dialogues with the UK made sure that this preferential access would remain even after Brexit.

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For the past two months, DTI said the Philippines engaged the UK on three high level dialogues: 1) meeting with UK Prime Minister’s Trade Envoy Richard Graham in February; 2) the first-ever PH-UK Economic Dialogue held in March, and 3) meeting with UK Foreign and Commonwealth Office Chief Economist Richard Salt in March.

“In all of these engagements, UK has given reassurances about the continuation of [the Philippines’] GSP+ level market access to the UK post-Brexit,” DTI said.

Moreover, UK has emphasized that the Philippines was one of its important trading partners in Asia, DTI said, citing the visit of Her Majesty’s Trade Commissioner for Asia-Pacific Natalie Black in October 2018.

“The retention of the Philippines’ GSP+ level preferential market access to the UK is a huge assurance for PH exporters. For products that are not covered by the GSP+, Most Favoured Nation rates will apply,” Lopez said.

“On this front, the Philippines is also actively engaged in negotiations in the WTO for the final MFN bound rates that UK will apply after Brexit to ensure that products of interest for the PH will not be prejudiced by any changes,” Lopez added.

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TAGS: Brexit, economy, Philippines, United Kingdom
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