The Department of Trade and Industry (DTI) is confident that the European Union’s (EU) new Generalized System of Preferences (GSP) scheme or GSP+ will help the government attain inclusive growth in the Philippines.
During a recent forum on this new scheme, DTI Undersecretary Adrian S. Cristobal Jr. said that the Department’s program to maximize the utilization of the GSP+ is expected to create jobs in the rural areas.
“We are encouraged and even inspired with the confidence of some sectors in projecting an immediate or short-term impact of about 200,000 jobs for the first year of the GSP+ implementation,” Cristobal said.
Likewise, data presented by Philippine Trade and Investment Center in Brussels Commercial Counselor Zafrullah G. Masahud, show that Philippine exports under GSP are expected to increase by 10.77 percent or €491 million in the first year of the GSP+ implementation. The products that are expected to significantly benefit from the implementation are animal or vegetable fats and by-products (e.g. coconut oil), prepared foodstuffs (e.g. prepared pasta, cashew nuts), textiles and textile articles (e.g. T-shirts, shawls, life jackets), footwear (e.g. footwear with non-applied soles), and vehicles (e.g. bicycles and parts).
During the forum, Cristobal shared the DTI’s three tiered strategy for GSP with the private sector. One is maximizing the utilization of the GSP+ with successive information sessions around the country and acquiring technical knowledge on rules of origin and knowledge on export product standards.
The second is monitoring the Philippine commitment to the EU in complying with the 27 international treaties and conventions. “We will have an inter-agency task force to make sure that we get these (monitoring) reports from agencies in a timely manner. The GSP tariff preference is granted on a unilateral or non-reciprocal basis. Cristobal added that the same task force will also monitor the execution and impact of DTI’s program to maximize GSP+ utilization.
The third is our next steps after the GSP+. For a country to stay as a GSP+ beneficiary, it must be in the low income category. The Philippines is considered in the low middle-income category.
“At the rate our per capita GDP growing, the 10-year window of the GSP+ may be shorter for good reason – the country continues to enjoy a stronger and more sustainable growth path. There is a sense of urgency here and we are mobilizing government agencies and the private sector to quickly take advantage of this tariff preference,” Cristobal said.
“In the meantime, we hope that government can conclude a free trade agreement (FTA) with the EU within that window because a free trade agreement is a permanent arrangement where Philippine products can enter the EU market at favorable tariffs or zero duty,” Cristobal said.
Cristobal added that the government will work with the private sector to identify areas of collaboration, assistance and intervention.
Masahud also underscored the importance of campaigns on the GSP+ utilization, and urged the use of DTI’s six commercial offices in the EU to help the country’s exporters find markets.
The EU ranked as the Philippines’ 4th largest trading partner, 4th largest export market, and 3rd largest import source. (END)