EU withdrawal of GSP+ privilege not seen derailing PHL recovery
By Revin Mikhael D. Ochave, Reporter
THE LOSS of preferential market access to the European Union (EU) via its Generalized Scheme of Preferences Plus (GSP+) scheme is not expected to deal a major setback to the Philippine economic recovery, economists said.
University of Asia and the Pacific Senior Economist Cid L. Terosa said in an e-mail interview that the Philippines has the sovereign right to manage its internal affairs without external intervention or pressure.
“The EU is an important trade and economic partner, but the Philippines has other partners that do not share EU’s point of view. I don’t believe that EU by itself can derail the impending economic resurgence of the country,” Mr. Terosa said.
The EU requires GSP+ beneficiaries to sign on to various core international conventions regulating worker rights, illegal fishing, and environmental protection. Occasional disagreements over the government’s human rights record have led to threats that the Philippines might be denied GSP+ market access.
“For several years now, domestic forces have driven the economy forward and cushioned the impact of external fluctuations on the Philippine economy. External forces have played second fiddle to the power of the domestic market,” he added.
On Feb. 17, the European Parliament approved a resolution that called on the Philippine government to address violence and human rights violations or risk temporarily losing access to GSP+ trading arrangements.
The resolution also urged the Philippine government to amend Republic Act No. 11479, or the Anti-Terrorism Act and its implementing rules and regulations, to meet international standards on counter-terrorism.
“I wouldn’t say it will stall our economic recovery but it would reduce our exports and lower our investment prospects,” Foundation for Economic Freedom President Calixto V. Chikiamco said in a mobile phone message.
Trade Secretary Ramon M. Lopez said in a Viber message that the allegations of the EU on human rights are “fake news” and give a false impression of the Philippines.
“While it is not new, their allegations on human rights and lack of press freedom are fake news, and those only give false impressions on the real situation in the Philippines. They should visit our beautiful country,” Mr. Lopez said.
“They should ask the Filipinos in their companies or communities. They should also ask the EU citizens (and) the EU business chambers in the country,” he added.
GSP+ allows zero-tariff entry of more than 6,200 Philippine products to EU. The benefits of the GSP+ will apply as long as the country complies with 27 conventions. The trade agreement started in January 2014 and is set to end on Dec. 31, 2023.
Mr. Lopez said the Philippines continues to provide updates to the European Commission. A GSP+ monitoring mission is due to evaluate the Philippines at the end of the month.
“This process is more systematic and organized in obtaining accurate information regarding the real situation in the country. They get to visit as well the projects and the marginalized sectors that get to benefit from the EU GSP+ and other stakeholders,” Mr. Lopez said.
In a statement on Sunday, the Department of Trade and Industry (DTI) said an existing dialogue mechanism allows discussion and clarification of the human rights situation and other concerns.
“The Philippines has been very cooperative with the EU and has repeatedly addressed these concerns in existing dialogue mechanisms. The Philippines remains compliant with the 27 international core conventions on human rights, labor, environment and good governance to enjoy GSP+ treatment,” Mr. Lopez said.
Mr. Lopez also said that GSP+ helps micro, small, and medium enterprises, fisherfolk, farmers, and workers in the export value chain.
According to Trade Assistant Secretary Allan B. Gepty, the Philippines is willing to work with the EU to address its concerns.
“This is not the first time that the European Parliament approved such a resolution. The European Parliament also passed similar resolutions in 2016, 2017, 2018, and 2020. The Philippine government remains ready to cooperate and work with the EU to clarify these issues and concerns,” Mr. Gepty said.
Joseph F. Purugganan, Trade Justice Pilipinas co-convenor, said in a mobile phone message that the Philippine government is solely responsible for drawing scrutiny from the EU.
“We support strongly the demand… to initiate withdrawal procedures for GSP+ trade preferences to the Philippines. Our position is that the Duterte government, by failing to act on the human rights situation and failure to comply with the obligations under the GSP+ program, has forfeited these preferences. The blame falls squarely on the government,” Mr. Purugganan said.
The DTI said exports to the EU under GSP+ were valued at 1.6 billion euros in 2020, for a utilization rate of 75% on eligible exports.
“The scheme benefits several communities such as, but not limited to General Santos, Davao, Cebu, and economic zones located in Laguna, Cavite, and Batangas, where most exporters, taking advantage of the scheme, are located,” the DTI said.