EU grants Philippines zero tariffs on strategic exports

MANILA, Philippines - The European Parliament on Thursday night (Manila time) completed the last stage in the process to grant the Philippines GSP+ that will provide duty free entry to the EU for some of the most important Philippine exports.

The GSP+ preferences cover over 6,200 tariff lines including fruit and foodstuffs, coconut oil, footwear, fish and textiles.

EU Ambassador Guy Ledoux called the development "a very good news for the Philippines."

"It will bring tariffs to zero percent for two thirds of tariff lines including strategic products that the Philippines is already exporting to the EU," Ledoux said. "This will immediately translate into savings of tens of millions of euros per year in foregone customs duties."

"Apart from giving a dramatic and immediate advantage to Philippine exports, the EU concession significantly improves the attractiveness of the Philippines as a destination for new agricultural and manufacturing facilities for products that will now enjoy duty free access to the EU," the ambassador added.

He said the grant gives the Philippines a comparative advantage and represents very tangible EU support to the Philippine strategy to increase exports and investments, and diversify its industry.

"The bottom line is more jobs for Filipinos in the Philippines," Ledoux said.

The Philippines is already a beneficiary to EU's Generalized Scheme of Preferences (GSP). Total exports to the EU that were eligible under GSP in 2013 amounted to €1.69 billion or 33 percent of total exports to the EU.

Actual utilization has been around 64 percent or €1.08 billion but this figure is set to rise as a result of GSP+.

The greatest benefit that is likely to be gained from GSP+ is the attraction of new industrial investments in sectors where relatively high tariffs are being slashed to zero under GSP+.

These include established Filipino exports that are labour intensive such as pineapple juice (currently 28.5 percent), garments (currently 5-9 percent), preserved fruits (currently 6-9 percent), tuna (currently 20.5 percent), fruit jams and jellies (currently 20.5 percent) and footwear (currently 11.9 percent).

The European Union provides GSP+ preferences to create economic benefits that will help the Philippines to assume its responsibilities under core international conventions on human and labour rights, environmental protection and good governance

The EU, a party to the conventions, said it will keep under review their effective implementation by the Philipppines, as well as its cooperation with their monitoring bodies.