EU trade performance a success for Philippines

MANILA, Philippines — The actual trade performance of the European Union’s Generalized Scheme of Preferences Plus (GSP+) has been a “great success” for the Philippines, EU Ambassador Franz Jessen said.

Although there were some concerns in certain partners of the Philippines, he said it is actually going very well as many of the products under the trade incentives for the country are agriculture products.

“You are doing much better in terms of export to the EU than you did before and it’s driven very much by this GSP+,” Jessen told The Chiefs on Wednesday night on Cignal TV’s One News channel.

“I think President Duterte probably appreciates that many of the products under GSP+ are agriculture products so it is a pro-poor agenda which fits very nicely with the government’s agenda. So the economic reality is good,” he said.

The GSP+, he said, was unilaterally given to the Philippines by the EU because of shared values and economic outlook.

“It is not something you apply for. You may have expressed interest in it but it is something being granted by the EU,” Jessen said. 

With completely removed duties for most products, an estimated P120 billion worth of Philippine exports benefited from the EU’s GSP+ and reached a record high in 2017.

But retaining the trade incentives lies on an assessment of the country’s implementation of international conventions, including human rights.

The EU granted to the Philippines beneficiary country status under the EU GSP+ in 2014 following former president Benigno Aquino III’s visit to Europe.

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

The EU, which is also a party to these conventions, will keep under review the effective implementation by the Philippines, as well as its cooperation with their monitoring bodies.

The European Commission adopted  in January its second biennial GSP report to the European Parliament and the Council, including an assessment of the Philippines’ implementation of 27 international conventions on human rights, labor rights, the environment and good governance that the Philippines has ratified as a sovereign country.

The assessment is based on reports from international monitoring bodies of the United Nations and the International Labor Organization, as well as dialogues with the government, civil society, business and trade unions.

In March 2017, the EU was urged to follow a proposal hitting the Philippine government where it may hurt most by removing trade incentives for the country to hold Duterte accountable for deaths under the war on drugs.

Members of the European Parliament asked the EU to put pressure on the Philippines by considering the removal of the GSP+ with the country.

Respect for human rights and rule of law are components in EU funding.

Setbacks

According to Jessen, the Philippines’ limitations to foreign ownership are holding back investments in the country as he expressed hopes a free trade agreement between the EU and the Philippines will be concluded soon.

“I hope very much that we can move forward,” Jessen said, “because I see our two economies have been so complementary.”

Former Supreme Court chief justice Hilario Davide Jr. warned that the Philippines will be a “colony” if foreign capital limits are lifted.

The Philippines, Davide said, has “one-fifth of the richest natural resources” and the Constitution was designed for these to be for Filipinos only.

Jessen also said the EU is still working on the language in the proposals and development cooperation with the Philippines that may have caught the ire of the Duterte administration.

Jessen said there were some concerns on the Philippine side about some of the language used in one of the annexes for the Philippines-EU development cooperation.

“In fact we have looked at that and the thing we have concluded, the language was not perfect and it could be adjusted and we have done that,” Jessen told The Chiefs.

“We have worked with the Department of Finance to make sure that the language used reflects the reality and should not be read in a way that can lead to misunderstanding,” he added.

According to Jessen, it was standard language the EU has been using for some years in different countries. 

“This is a two-way street. This is two equal partners and so on. It’s a valid point and we try to accommodate that,” Jessen said.

The Philippines formally rejected in January the EU’s €6.1-million trade-related technical assistance to the country when the government returned the document financing the EU-Philippine Trade Related Technical Assistance (TRTA) unsigned.

Jessen said the Philippines returned to the EU the document on TRTA project, citing disagreement between the two sides that are related to the word “rule of law,” “democracy” and “human rights.”

The EU committed €6.1 million in continued assistance to the Philippines’ effort to promote trade and investment for further economic development, inclusive growth and poverty reduction.

No megaphone diplomacy

But Jessen said the EU will not hesitate to speak out about national issues if there is a need to do so, though they prefer to talk through private dialogues.

“We are not on our side very good at using the press release type of dialogue, so we prefer to talk with government officials and go through the different things that are there,” Jessen said.

The ambassador stressed that it is a question of “working hand in hand” with the Philippines.