The powerful European Parliament and European Council support the proposal of the EU Commission, the executive branch of the European Union (EU), for a four-year roll-over of the existing EU-Generalized System of Preferences (GSP+), which grants zero tariffs on the Philippines’ more than 6,000 export items, following the political and economic blocs’ glowing report on the Marcos’ administration’s progress in advancing economic and social rights and its revised human rights-based approach to drug control and counter-terrorism.
Trade and Industry Secretary Alfredo E. Pascual revealed the good news in a speech at the Pilipinas Conference 2023 on the theme “The Path Towards Economic Security in 2024: Turning Geopolitical Risks into Opportunities Through Strategic Optimism” on Wednesday, Nov. 22, in Makati.
“The report that I got yesterday is that the proposal of the European Commission for the roll-over of the existing GSP+ or rather for another four years has been supported by the European Parliament and the European Council. That is good news for us. At least we have another four years, this is very important for our tuna exporters producers of manufactured products,” Pascual said.
The Philippines is the sole beneficiary in the EU-GSP+ among ASEAN countries, giving it a wide advantage over its neighboring countries, whose exports are subject to regular tariff rates.
The EU-GSP+ grants the Philippines zero tariffs on 6,274 products or 66 percent of all EU tariff lines. Its top exports to the EU include crude coconut oil, tuna, pineapple, and other agricultural products. The old GSP+ is set to expire end of December this year.
The GSP+ is a special incentive trade arrangement for the Implementation of 27 international conventions on labor and human rights, environmental protection and good governance. This comes in the form of zero duties and offers a more generous scheme of preferences compared to the regular GSP.
Pascual said there are conditionalities in the renewal of the trade privilege but refused to comment further, saying these could be “very political”. There are also different requirements of the GSP+ beneficiary countries and reconcile.
He then proceeded to encourage exporters to join and expand their exports to the EU while the preferential tariffs are in effect.
In 2022, EU data showed that the Philippines exported 2.95 billion euros to EU from 2.047 billion euros in 2021 under the EU-GSP+ scheme.
Based on the Joint Staff Working Document on the latest EU Special Incentive Arrangement for Sustainable Development and Good Governance (GSP+) assessment of the Republic of the Philippines covering the period 2020-2022 submitted to the EU Parliament and EU Council, it stated that “the new Government, which came to power on 30 June 2022 through open and competitive presidential elections, has affirmed its commitment to the compliance with the GSP+ commitments since the beginning.”
It further noted that recent dialogue under the GSP+ framework as well as in other fora has been constructive and the Philippines has taken several steps to address points of concern. The situation continues to progress under the current administration.
During the reporting period, EU monitoring focused on extra-judicial killings, intimidation of and attacks against civil society (including red-tagging and violence against human rights defenders and media professionals), child labor, labor rights and cooperation with United Nations (UN) bodies including the International Labor Organization (ILO).
A GSP+ monitoring mission to the Philippines took place from Feb. 28 to March 4, 2022.
The conclusions from the mission, which took place when the former administration was still in power, showed a mixed picture with some positive developments under economic and social rights but continued violations of civil and political rights.
But positive developments were noted under the new administration, which took office on June 30, 2022.
In the reporting period (2020-2022), human rights concerns relate notably to extra-judicial killings of people allegedly involved in the trade and use of drugs under the previous administration, and the insufficient investigation and prosecution thereof, as well as to impunity around attacks, harassment, red-tagging and, in some cases, killings of human rights defenders, political opponents, members of clergy, journalists, trade unionists, environmental defenders, and indigenous people.
But the new administration, the report said, has shown willingness to engage with the international community on human rights, having actively participated in multiple mechanisms of the UN Human Rights Council (UNHRC).
The government has taken several positive steps, notably in the framework of the UN Joint Programme for capacity building and technical cooperation on human rights signed in July 2021.
More recent positive developments include the government’s new focus on prevention and rehabilitation in the “war on drugs”, active participation in the works of the UNHRC and the visits of several UN Special Rapporteurs.
The government has also made statements on its intention to fight against impunity, it added.
It noted the new government’s announcement that it does not plan to reinstate the death penalty, and the Philippines was actually among the 125 countries to vote in favor of the 9th UN Resolution of Dec. 15, 2022 for a global moratorium on the death penalty.
Notwithstanding the positive developments, the EU would expect more resolute actions to address the outstanding issues of concern, particularly ensuring accountability for extra-judicial killings and other human rights abuses, notably related to the “war on drugs” campaign, combating the harassment of civil society, as well as violence against journalists.
The Philippines’ legislative framework protects to a large extent the civil and political liberties of its citizens, with a few exceptions, it added. Liberty of expression and of the media and the Internet are in general granted, and relatively high in comparison to other countries in the region. However, effective implementation of this legislative framework due to institutional weaknesses and lack of capacity remain problematic.
During the reporting period very serious violations of the freedom of association were reported, including allegations of extrajudicial killings of trade unionists, red-tagging, harassment, death threats and intimidation and arrests and detentions of trade union members. It cited an ILO report in 2021 concluded inter alia that there was no tangible progress in any of the areas covered.
But since the new administration took office, the report said, there is movement in the right direction with some tangible results, like improved cooperation with the ILO, in particular the submission to the ILO of a tripartite roadmap in September 2023.
However, concrete results on other issues are still pending, it added.
Some progress was noted in the fight against child labor, notably in terms of legislation against the online sexual exploitation of children and tackling trafficking in persons. These laws have augmented the legal protection of minors against online sexual exploitation, regardless of any form of consent from the child, and introduced additional tools to pursue human traffickers both online and offline and to enhance the surveillance and investigation of those crimes.
Overall, the report said that national labor laws need to better align with international standards on freedom of association, and the protection of workers’ right to security of tenure should be ensured.
On environment and climate, the report said that the Philippines has made good progress on the implementation of all relevant environmental and climate conventions, has ratified the Kigali Amendment to the Montreal Protocol on Substances that Deplete the Ozone Layer and is preparing for the ratification of the Basel Ban Amendment to the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes.
The Marcos administration was further cited for taking steps towards the implementation of the Convention on International Trade in Endangered Species of Fauna and Flora (CITES), but there have been no notable developments in the implementation of the Cartagena Protocol on Biosafety since 2020.
The Philippines has applied to receive technical support towards the implementation of the Stockholm Convention on Persistent Organic Pollutants.
On good governance in the area of drug control, the report noted that the 2020 the International Narcotics Control Board (INCB) stated that “extra judicial responses to drug-related activities were in clear violation of the international drug control conventions” and in 2021 and in 2022 continued calling on the government to issue immediate and unequivocal condemnations and denunciations of such actions and to stop them immediately.
But the new administration has indicated that the national drugs policy is shifting to prevention and rehabilitation in accordance with international human rights commitments. This more balanced approach towards anti-drug policy on the supply and demand sides should continue. The deficiencies in the judiciary system and in law enforcement still need to be addressed, and perpetrators of human rights violations brought to justice.
Overall, the EU report said the Philippines maintained ratification of all 27 GSP+ related international conventions. The country fulfilled only in part and in some cases with continued delays its reporting
obligations and some of the reports related to the environmental conventions are still due.
The top GSP+ exports of the Philippines include: crude coconut oil, vacuum cleaners, prepared or preserved tunas, electro-thermic hair dressing apparatus, spectacle lenses, new pneumatic tires, prepared or preserved pineapples, fatty alcohols (industrial), parts suitable for use solely or principally with transmission and reception apparatus for radio-broadcasting or television, and activated carbon.
This increase in exports has benefitted several communities including, but not limited to General Santos, Davao, Cebu, and economic zones located in cities such as Laguna, Rosario (Cavite), and Batangas, where most of the exporters that take advantage of GSP+ preferences are based.
GSP+ also gives an impetus for foreign companies to invest in the Philippines.
A number of companies have established their manufacturing operations in the Philippines in order to take advantage of GSP+ benefits, thereby contributing to employment generation and the developmental goals of the country. These operations cut across a range of industries including electronics, agriculture, processed foods, apparel, craft goods, travel goods, and home appliances.
As a developmental tool, GSP+ helps exporters by making it easier for them to export their products to the European Union. This is done in the form of reduced tariffs for their goods when entering the EU market.
Through the additional export revenue generated, GSP+ fosters growth in income, supports employment creation, and ultimately, contributes to countryside development and inclusive economic growth.