The European Union (EU) on Tuesday commended the Philippines for the record-high 80 percent utilization rate of its trade perks under the Generalized Scheme of Preferences Plus (GSP+) last year.
The GSP+ is an incentive scheme that grants the Philippines zero percent tariffs for almost 7,000 EU product lines provided that it complies with its obligations to 27 international conventions covering good governance, and human and labor rights, among others.
“The GSP+ utilization of the Philippines has shown an upward trend over the years. We have also the 2024 results and it reached 80 percent of use — this is a record, there was never such a high level of utilization of GSP+ by the Philippines,” EU Ambassador to the Philippines Massimo Santoro said at a Makati Business Club forum.
In 2023, the Philippine GSP+ utilization rate or percentage of transactions using the GSP+ preferential rate in comparison to eligible transactions was 73 percent.
The Philippines is currently the only Southeast Asian state that benefits from the EU GSP+ scheme.
Santoro, meanwhile, hoped to see the conclusion of an EU-Philippines free trade agreement (FTA) by the time the latter graduates into an upper-middle income state.
After the transition period, the envoy said Manila would effectively lose its privileges under the GSP+, which is originally intended to help developing countries pursue sustainable development.
“Of course, the FTA would stand as an immediate relay if negotiations will be concluded on time,” he said.
“The target should be that with the FTA, we make it universal, so (that it’s) not only related to these 7,000 but all products,” he added.
On track
Santoro said negotiations on an FTA is “on track” and that the EU is eager to fast-track the talks against the backdrop of the Trump administration’s tariffs on trade partners, including the Philippines and the bloc.
Last May 7, EU Commissioner for Trade and Economic Security Maros Sefcovic said they are “making sure that the EU is not putting all its eggs in one basket” amid the current geopolitical climate and that bilaterally, the bloc is “accelerating the negotiations with Indonesia, the Philippines, Thailand, and Malaysia.”
“We are definitely on track with the negotiations. The European Commissioner fully reflected the view of the EU as a whole,” said Santoro in a separate interview.
“We mentioned before the tariff-related aspects, we mentioned the accelerating factor that they can have for the FTA, at the same time, we also mentioned together the importance of content to go together with speed,” he added.
The envoy said the bloc hopes to include a “digital chapter” in the FTA, which could cover the treatment of digital products and e-commerce, among others.
The EU’s previous FTAs lack a digital chapter as it was only recently that digitalization “gained in importance and speed,” he said. (PNA)
