On December 18,2014, the European Parliament officially granted the Philippines’ request for inclusionin the European Union’s (EU) General System of Preferences Plus (GSP+). With the inclusion of the Philippines in the EU GSP+ scheme, the Philippines will get to enjoy zero duty for all 6,274 covered products, translating to increasein the country’s exports to the EU, resulting to more employment opportunities.

“The Philippines is now the 14th beneficiary country of the EU GSP+ and the only GSP+ beneficiary in ASEAN”, Trade and Industry Minister Gregory L. Domingo said.

Bicycle/E-Bicycle Industry to Benefit

According to Waltervan Hattum, Head of Economic and Trade Section of the EU Delegation to the Philippines,the bicycle manufacturing industry is expected to benefit from the GSP+ scheme considering there has been some presence of bicycle parts manufacturing firms in the country. Philippine Embassy in Beijing Commercial Counselor Christinedela Cruz shared that Chinese vehicle parts manufacturers, particularly bicycle, electric bike, electric vehicles assemblers and parts manufacturers should capitalise on this favourable development in the Philippines.

Currently,completed units of bicycles including parts and accessories that are originating from China face 19.2-48.5% anti-dumping duty in the EU. Moreover, exports of bicycle parts and accessories from Indonesia, Sri Lanka and Tunisia also face circumvention anti- dumping duties. The Philippines on the other hand enjoys GSP+ further reducing tariff of bicycle, e-bicycles parts andaccessories to zero. Import Tariff Comparison – Bikes, e-bikes, parts & accessories
Product Origin Bikes(CBU) E-bikes Parts and Accessories
MFN 14% 6% 4.7%
China (anti-dumping duties) 19.2% - 48.5% 19.2% - 48.5% 19.2%
Philippines GSP before January 2015 10% 2.5% 1.2%
Philippines (GSP+) starting 2015 0% 0% 0%

If Chinese firmscan capitalise on existing capabilities of Philippine local parts manufacturing industry and in strict compliance to EU’s Rules of Origin, Chinese firms canexpect to

§ expand business activities in foreign markets, successfully implementing the Chinese government’s “Going Out” policy by partnering with Philippine assemblers,importers and parts manufacturers through joint ventures. Chinese firms can also capitalise on local market knowledge of Philippine companies thus expanding foothold in the highly consumption-driven Philippine market.

§ expand utilisation of Chinese electric vehicle technology through joint ventures with Philippineassemblers and parts manufacturers

§ improve consumer perception about “Made in China”products by ensuring that units assembled and manufactured in the Philippines meet international standards. Joint venture with local Philippine firms will ensure that maintenance, repair and after sales service is part of the product lifecycle.

§ maintain EU as an important export destination of electric vehicle parts and components through joint venture with Philippine assembler and manufacturers.

Chinese firms engaged in the electric bike, electric motorcycles and electric buses have aninitial 3 years (until 2018, extendable depending on EU’s assessment) to take advantage of the GSP+ recently granted by the EU to the Philippines. Instead of losing market leadership in the EUdue to anti-dumping duties imposed on China-originating products, Commercial Counselor dela Cruz believes that setting up/forming joint ventures with Philippine companies and then exporting from the Philippines to the EU could address these challenges that Chinese firms are faced with.

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(October 2014, Beijing) China Bicycle Association (CBA)Chairman Ma Zhongchau (3rd from left, first row) welcomes Electric Vehicle Association of the Philippines (EVAP) on a business mission to China. EVAP President Rommel T. Juan (2nd fromright, first row), Philippine Embassy in China Commercial Counselor Christine Rodriguez dela Cruz (3rd from right, first row) with CBA and EVAP representatives.

Philippine Trade and Investment Centre

Working with abroad spectrum of government and private sector groups to articulate, develop,promote Philippine trade and investment interests overseas, the PhilippineTrade and Investment Centre in Beijing (PTIC Beijing)/the Commercial Section ofthe Embassy of the Philippines serves as the international trade policy negotiation, trade & investment promotions arm of the Republic of the Philippines in China.

For more information on GSP+ and list of eligible products, you may get in touch with the Philippine Trade and Investment Center/Commercial Section of the Philippine Embassy in China through:

TelephoneNumber: +86.10.85865817 Fax Number : +86.10.85865975 Email Address : Beijing@dti.gov.ph Website : www.investphilippines.gov.ph Sourcehttp://www.eabc-china.org/Content.aspx?id=48&sid=580