Trade and Industry Secretary Alfredo E. Pascual delivered a strong message of commitment to the EU-PH partnership in trade and investment before the EU Parliament Committee on International Trade as it seeks for the Philippines continued EU-GSP+ status.
The EU is now in its last critical last month of the monitoring process for the renewal of the Philippines GSP+ preferential status.
Manifesting willingness to work closely with the EU, Pascual on Thursday, Oct. 27, highlighted before the EU Parliament committee the EU-GSP+ support in improving bilateral relations and socio-economic development in the Philippines, as well as policies and programs of the new administration that reaffirms the country’s compliance with international conventions.
The Generalized Scheme of Preferences Plus (GSP+) is an incentive arrangement that grants the Philippines zero tariffs on 6,274 products or 66 percent of all EU tariff lines. This preferential trade is maintained, while the country upholds its commitments under the GSP+ select 27 international conventions on human rights, labor, good governance, and environment.
“The Philippines is an attractive investment destination given its solid macroeconomic fundamentals, enabling policy environment, and young and trainable workforce. With a stable and predictable political regime, our country is well-positioned in the Indo-Pacific to become a regional hub for manufacturing, innovation, training, and education,” Pascual said.
He cited EU for being one of its top partners in trade and investment, attributing the EU-GSP+ as an enabling factor to attain this. Since the Philippines' successful application to the GSP+ in 2014, the country has benefited from increased market access to the EU. Philippine exports to the EU climbed from EUR5.3 billion in 2014 (under the standard GSP) to EUR7.77 billion in 2021. In 2021, the Philippines recorded its highest utilization rate at 76 percent of total eligible exports, including tuna, processed fruits, and spectacle lenses.
The GSP+ has benefited EU companies as well, as they invest in manufacturing facilities in the Philippines to take advantage of the country's extensive and expanding domestic market as well as its network of FTAs, which includes those with ASEAN. They have also gained from relatively lower cost of raw materials.
Further, he identified significant developments in the Philippine landscape—change in government leadership, transition to a preventive and rehabilitative anti- illegal drugs campaign, assurance of press freedom, and a vow to combat climate change, all of which indicate that the country is set on pursuing good governance and building back better.
“Given the foregoing and the values and principles we share, the Philippines remains interested and therefore ready to work toward the resumption of negotiations of the Philippine-EU Free Trade Agreement (FTA),” he said.
Pascual further cited that a 2020 study shows that 83 percent of German companies want to resume the FTA negotiations, citing huge potential for EU companies, with the FTA positively affecting competitiveness,” he added.
Lastly, Pascual cited the DTI’s strategic initiative to promote regional industrialization through innovation and entrepreneurship. Seeking to translate benefits from trade and investment into programs that will improve the quality of life of Filipinos, Secretary Pascual continued, “we will go town by town, city by city, province by province and region by region, making sure that no one is left behind.”