The European Union plans to extend the effectivity of the Generalized Scheme of Preference by another four years.
“The GSP regulation removes import duties on products imported to the EU from vulnerable developing countries and contributes to poverty eradication,” the EU Trade announced on social media platform Twitter on Tuesday.
A Philippine trade delegation met with key European Union officials to discuss the renewal of the EU GSP Scheme, which is set to expire in December 2023.
Trade Secretary Alfredo Pascual said the proposed extension of GSP at an opportune time was expected to open a multitude of opportunities for the Philippines.
“The GSP extension is a significant boost for our exporters. It will enable them to maintain their competitive edge in the EU market and expand their trade volumes. This development reinforces our commitment to strengthen our trade relations with the European Union,” said Pascual as the delegation to Europe winds down the three-week Europe Investment Roadshow.
GSP is a preferential trade arrangement that grants developing countries, including the Philippines, reduced or zero tariffs on exports to the EU market. With the proposed extension until December 2027, Philippine exporters can continue to benefit from enhanced market access and reduced trade barriers when exporting their products to EU member states.
It consists of three arrangements, the first being the Standard GSP for low and lower-middle income countries, providing for a reduction or full removal of customs duties on 2/3 of EU tariff lines.
Meanwhile, GSP+ is a special incentive arrangement for sustainable development and good governance, granted to vulnerable low and lower-middle income countries that implement 27 international conventions related to human rights, labour rights, protection of the environment and good governance.
The third is the Everything But Arms or EBA which is a special arrangement for least-developed countries, providing them with duty-free, quota-free access to the EU market for all products except arms and ammunition.
Unless a new regulation replacing the existing is adopted prior to that date, the Standard GSP and the GSP+ arrangements will cease to apply starting Jan. 1, 2024.
Imports from developing countries under Standard GSP and GSP+ will be subject to the Most Favoured Nation (duties. However, imports from most developing countries would still be covered by the EBA arrangement, which does not have an expiry date.
The EU is one of the Philippines’ largest trading partners, and the GSP plays a crucial role in facilitating trade between the two regions.
The extension of the GSP will provide stability and predictability to Philippine businesses, allowing them to plan and invest for the long term, according to the DTI.
It also serves as an incentive for European companies to explore partnerships and invest in the Philippine market, fostering economic growth and facilitating employment generation.
The DTI said it would actively engage Philippine exporters and provide support in maximizing the benefits of the GSP extension.
Pascual underscored the importance of raising awareness among local businesses about the GSP scheme and its potential advantages.
“With the extension of the GSP, it opens up tremendous opportunity for the Philippines to strengthen trade relations with the EU. We will seize this opportunity and work toward maximizing the benefits for our exporters and the overall economic development of our country,” Pascual said.
