Philippines the First ASEAN Country to Join the EU’s General System of Preferences Plus (GSP+)
On December 18, 2014, the European Parliament officially granted the Philippines’ request for inclusion in the European Union’s (EU) General System of Preferences Plus (GSP+). The Philippines will soon be able to export, tariff-free, over 6,200 products (66 percent of all product tariff lines) to the EU, including processed fruit, coconut oil, footwear, fish, and textiles.
In a statement about the inclusion of the Philippines in GSP+, EU Ambassador Guy Ledoux stated: “This is very good news for the Philippines as 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. This will immediately translate into savings of tens of millions of euros per year in foregone customs duties.”
The EU is the Philippines’ fourth largest trading partner and fourth largest export market – accounting for 11.56 percent of total Philippine exports. In 2013, the Philippines and the 28 Member States of the EU reached US$12.8 billion in bilateral trade.
GSP+, which the Philippines applied to join on February 28 of last year, is the next round of the EU’s Generalized Scheme of Preferences (GSP) – a trade preference scheme for developing countries and which covers a total of 6,274 tariff lines. Under the original GSP, the Philippines was able to export 2,442 products to the EU duty-free and reduced tariffs were applied to a further 3,767 products. GSP ended its cycle in December 2014.
Philippine Trade Undersecretary Adrian S. Cristobal Jr. has indicated that he believes GSP+ will help to boost the country’s trade with the rest of the world and substantially reduce poverty at home. An estimated 200,000 new jobs will be created mainly in the agriculture and manufacturing sectors, most of which will be in rural areas outside the major cities. The job creation and increased revenues from trade will also help to contribute to governmental economic rehabilitation efforts, especially in areas devastated by typhoon Haiyan last year.
The Philippines has been in need of some good economic news, the recent Thomson Reuters/INSEAD Asia Business Sentiment Index found that business sentiment in the country dropped from 83-67 in the final quarter of 2014 – this was the largest decline in Asia. However, any number over 50 is still seen as positive. In 2015, it is to be hoped that GSP+, when combined with such factors as the low price of oil, will help boost the Philippine economy and create a growing wave of optimism throughout the business community.
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