Delegation of the European Union to the Philippines

"GSP+ exports estimated at record high of PHP 120 billion - dialogue on international conventions ongoing

22/01/2018 - 06:56
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Today, the European Commission adopted its second biennial GSP report to the European Parliament and the Council, including an assessment of the Philippines' implementation of 27 international conventions on human rights, labour rights, the environment and good governance.  

GSP preferential imports to the EU amounted to over EUR 63 billion in 2016 and the Philippines is increasing its share in it since December 2014 when it became a GSP+ beneficiary. In 2016, the Philippines exported goods worth EUR 1.67 billion to the EU under GSP+ preferential treatment.

Head of EU Delegation Franz Jessen stated that: "Thanks to completely removed duties for most products, the Philippines' exports to the EU grew by over 21% since last year. An estimated PHP 120 billion worth of exports were benefiting from GSP+ trade preferences, especially in the food and agricultural sector. This makes the EU the Philippines' second largest export partner, after Japan and before the US and China. As part of the Philippines's commitment under GSP+, the EU and the Philippines have an ongoing dialogue on the implementation of 27 international conventions on human and labour rights, the environment, and good governance. We see progress in some areas (for instance labour and environment), and have a frank discussion on others (such as death penalty)."

Exports of the Philippines to the EU under GSP+ increased from EUR 584 million in the first half of 2015 to EUR 903 million in the first half of 2017. The largest increases in 2017 were registered including for animal products (+64%), fish and related products (+71%), prepared foodstuffs (+60%), edible fruits (39%), but also automotive parts (+45%), leather (+77%), textile (145%) and footwear (+74%).

The GSP report assesses progress in the implementation of 27 international conventions that the Philippines has ratified as a sovereign country. The assessment is based on reports from international monitoring bodies of the United Nations and the International Labour Organisation, as well as dialogues with the Government, civil society, business and trade unions.

For instance, with regard to labour rights, the Government's socio-economic plan addresses some of the pertinent labour issues aiming to end the so called 'endo' scheme. A key issue to be further addressed is ensuring investigations of violence against trade unions and prevention of such cases, as well as alignment of labour legislation with ILO Convention 87 on freedom of association. With regard to environmental protection and climate change, the Philippines has ratified the Paris Agreement and made progress on tackling illegal ivory trade, also in cooperation with the customs office. Progress has also been noted in areas such as gender equality, people trafficking, health, education, social-economic rights, and the fight against corruption. However, extrajudicial killings, in particular in the fight against illegal drugs, related impunity, as well as the possible reintroduction of the death penalty and the lowering of the age of criminal responsibility are of serious concern.

The EU will continue to work closely with the Philippines through the ongoing GSP+ monitoring process, seeking to provide support to ensure that continued and tangible progress is made on implementing the 27 international conventions.

Since 1971, the EU Generalised Scheme of Preferences ('GSP') has assisted developing countries in their efforts to reduce poverty, promote good governance and sustainable development. By providing preferential access to the EU market, the GSP helps developing countries generate additional revenue through international trade. Regulation (EU) No 978/2012 of the European Parliament and the Council of 27 October 2012 on applying a scheme of generalised tariff preferences ('the GSP Regulation') is the legal framework for the GSP. The scheme is in line with WTO law, having been introduced under the so-called 'Enabling Clause', which allows an exception to the WTO 'Most-Favoured Nation' principle.

The current GSP Regulation in place since January 2014 requires the Commission to submit a biennial report to the European Parliament and to the Council on the effects of the GSP over the previous two year period. An accompanying 'Staff Working Document' focuses on GSP+ beneficiaries. This is the second report. The first report on the effects of GSP in general and GSP+ in particular, covering the period 2014-2015, was published in January 2016.

GSP, comprising of Standard GSP, GSP+ and Everything But Arms (EBA), is the EU's flagship trade instrument to support developing countries. The report demonstrates that trade preferences under GSP increased EU trade with developing countries. Between 2014, when the reformed GSP entered into force, and 2016, total EU imports benefitting from GSP trade preferences increased by 23% to EUR 63 billion. Least developed countries (LDCs) benefited most with EU imports increasing by around 38% to EUR 23.5 billion.

The report also shows the positive effects that the Special Incentive Arrangement for Sustainable Development and Good Governance, known as GSP+, has had on human and labour rights, environmental protection and good governance in the ten monitored GSP+ beneficiaries during the period 2016-2017: Armenia, Bolivia, Cabo Verde, Georgia, Kyrgyzstan, Mongolia, Pakistan, Paraguay, Philippines and Sri Lanka.

The European Union provides GSP+ preferences to create economic benefits that will help the Philippines to assume its responsibilities under core international conventions on human and labour rights, environmental protection and good governance. The EU, which is also a party to these conventions, will keep under review their effective implementation by the Philippines, as well as its cooperation with their monitoring bodies.

GSP+ beneficiaries export around 66% of all EU tariff lines duty-free in return for their commitment to effectively implement 27 international core conventions covering labour rights, human rights, good governance and environmental concerns. In 2016, the EU imported goods worth EUR 7.5 billion from GSP+ beneficiaries. The biggest GSP+ beneficiaries were Pakistan and the Philippines.

A GSP+ monitoring mission to the Philippines, which also visited the island of Palawan, took place from 26 January to 2 February 2017.

During the GSP+ monitoring cycle 2018-2019, the EU will engage with each GSP+ beneficiary on the conclusions of the report and priority actions. Joint EEAS-Commission GSP+ monitoring missions will specifically target beneficiaries where strengthened efforts are required due to more serious shortcomings. The EU will continue to support ILO efforts to improve GSP+ countries' compliance with ILO reporting and implementation obligations. The EU is also funding a three-year project of EUR 4.5 million to empower local civil society organisations to contribute more effectively to the implementation of the 27 conventions.


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