FTAs crucial as Philippines approaches upper middle-income status
The Philippines’ progress to upper middle-income status will make concessional trade privileges harder to come by, making free trade agreements (FTAs) with blocs like the European Union (EU) a matter of urgency in order to lock in advantageous trading terms, the Department of Trade and Industry said.
Trade Secretary Alfredo E. Pascual told reporters on the sidelines of the Mega Global Corp.’s cannery inauguration in Sto. Tomas, Batangas on Wednesday that the Philippines will be ineligible for the EU’s Generalized Scheme of Preferences Plus (GSP+) trading scheme once it becomes an upper middle-income country.
“As an upper middle-income country, the Philippines will no longer be eligible for GSP+,” Mr. Pascual said.
As such, Mr. Pascual highlighted the importance of “resuming our discussions on a full-fledged FTA between the Philippines and EU.”
On Feb. 22, Mr. Pascual met with members of the EU Parliament sub-committee on human rights to discuss the GSP+ renewal, a possible FTA, and improving economic relations.
The last round of FTA negotiations between the Philippines and EU was in 2017.
The GSP+ is available to low and lower middle-income countries. To maintain eligibility, countries are required to implement 27 international conventions related to human and labor rights.
Philippine eligibility for GSP+ is set to expire at the end of 2023.
In December, the National Economic and Development Authority said that the Philippines is projected to hit upper middle-income status in 2024 or 2025.
According to Mr. Pascual, the EU delegation was receptive to proposals to resume negotiations.
“With or without the requirements of EU, we are observing the principles that they are interested in,” Mr. Pascual said.
“Our own agencies are very much aware of the principles and we are a signatory to a number of international conventions,” he added.
The Philippines has been eligible for GSP+ since 2014. The trading scheme offers zero tariffs for 6,274 products, equivalent to 66% of all EU tariff lines.
Some of the country’s top GSP+ exports are crude coconut oil, vacuum cleaners, hairdressing equipment, prepared/preserved tuna, eyeglass lenses, lead-acid accumulators, electric hair dryers, and new pneumatic tires.
Source: Business World