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Philippines on Track to Gain GSP+ Status with EU

The Philippines may soon be able to export goods duty free to the European Union as the European Commission has favorably endorsed the country’s application for GSP+ status.

After reviewing the Philippines’ application, which was submitted in February, the European Commission found that the country meets the eligibility criteria and has forwarded its recommendation for approval to the European Parliament.

The GSP+ program, part of the E.U. Generalized System of Preferences (GSP), offers eligible countries zero tariffs on all products covered by the scheme. The Philippines already benefits from GSP trade privileges with the E.U., but only enjoys tariff free exports on a limited number of products.

According to Maria Lyra Traversa, a press officer for EU Trade Policy at the European Commission, the Commission sent a legal act to the European Parliament at the end of August proposing that the Philippines be granted GSP+ status. Traversa said, “The Philippines application is still under-going legislative scrutiny,” as the act can only take effect upon Parliament’s approval. Parliament has up to four months to approve, or oppose, the act, but according to Traversa, it is too early to tell what its position will be.

If the GSP+ status is awarded, the Philippines will enjoy duty free exports on big ticket items it already exports to the E.U. like textiles and garments, prepared foodstuffs and plastic products by early 2015.

In a July statement, Philippines Department of Trade and Industry (DTI) Trade Undersecretary Adrian Cristobal Jr., said the country has been intensifying its efforts to secure GSP+ and increase trade with the E.U.

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“On the domestic side, we shall convene the PH task force for GSP+ to ensure that our industries are ready to take advantage of GSP+ market access, once approved,” Cristobal said. “This includes technical assistance and capacity building for Philippine exporters to Europe, through the EU’s Trade Related Technical Assistance (TRTA) Project. We also need to identify trade barriers that our exporters are facing, among others.”

The Philippines exported 176 million euro ($227 million) worth of textiles and textile articles to the E.U. in 2013, down 20.8% from the previous year, and the in-need industry is expected to benefit from the tariff free trade status.

According to Cristobal, if the E.U. approves the Philippines’ GSP+ application to cover more than 6,000 products under the preference program, the resulting trade privilege will translate to enhanced production capacity and could generate 270,000 jobs in the country’s manufacturing and agriculture sectors.