UK eyes rebranded GSP, FTA with Philippines post Brexit

MANILA, Philippines — Following its exit from the European Union, the United Kingdom is looking at undertaking a review of trade preferences enjoyed under a rebranded EU Generalized Scheme of Preferences Plus (GSP+) and making improvements to strengthen ties with the Philippines, a top UK trade official said.

In the long term, the UK would also want to enter into a free trade agreement (FTA) with the Philippines.

UK Prime Minister’s Trade Envoy to the Philippines Richard Graham told reporters while the UK would be rolling out a rebranded GSP+, to be called UK GSP on Dec.31, it intends to look at how improvements can be made to boost trade ties between the two countries.

He said the rebranded UK GSP would have the same arrangement as the EU GSP+, which allows the duty-free entry of 6,274 products from beneficiary countries like the Philippines.

 “But over time, the [UK] ambassador and his team will be able to review this with [Trade Secretary] Ramon Lopez and his team and see if there are opportunities to improve this and to tailor the existing arrangements for the UK and Philippines,” Graham said.

He said there are countries in Europe that are a bit more protective in terms of agriculture because they have similar products with the Philippines.

“But we don’t. So, it may be easier for us to be more open to the Philippines on that side and we might give more access on the services side in other sectors,” he said.

Beyond improvements to the UK GSP, Graham said the UK would also be interested in entering into a FTA with the Philippines.

“I think the potential for a FTA is quite strong in the future,” he said.

But before the FTA with the Philippines, he said the UK would be having talks for potential bilateral trade agreements with major markets like the US, Japan, Australia and New Zealand first.

The UK considers the Philippines an important market in Southeast Asia given strong economic growth, as well as opportunities in various sectors including business process outsourcing and manufacturing.

 “There is just a need to make sure the tax rules are clear and favorable,” Graham said.

Under the Corporate Income Tax and Incentives Rationalization Act (CITIRA) bill approved on third and final reading at the House of Representatives, the government aims to gradually reduce the corporate income tax rate to 20 percent from 30 percent, and introduce changes to the incentives regime.

CITIRA has yet to be approved at the Senate.

Graham is in the Philippines to promote trade and investments between the UK and Philippines, as well as showcase the UK’s expertise in technology, healthcare, aviation, defense, infrastructure and education.