The Philippines’ exports to the European Union have “increased remarkably” at 36 percent in the first half of 2017, discloses European Union Ambassador to the Philippines Franz Jessen, describing the growth as “enormous” and attributing this to the Philippines’ GSP+ status since December 2014.
Under the EU Generalized Scheme of Preferences, the Philippines is able to export goods to the EU with zero duties.
In 2016 alone, it was able to export Euro 1.71 billion worth of goods and services to the EU.
Largest export market
In the first quarter of 2017, the EU became the fastest growing and largest export market for Philippine goods, making up 15.5 percent of the total exports.
In the agricultural sector, exports to EU reached almost P50 billion in 2016, and over 75 percent of this entered the EU duty-free, said Jessen.
Agri-oil products, electrical machinery, processed meat and fish, optical products, and processed vegetables, nuts, and fruits are the top Philippine exports to the EU under the GSP+ for 2017.
But to maintain GSP+ status, the Philippines has to implement 27 international conventions on human and labor rights, environmental protection, and good governance.
At a press conference in the middle of the week to promote the EU-Philippines Business Summit 2017 (organized by EU-Philippines Business Network, or EPBN, on October 17 at the Solaire Grand Ballroom), Jessen said that the EU wants to continue its political, economic, and trade relationship with the Philippines, and is trying to make sure the relationship is “as good and as close as we can have it.”
Based on values
He pointed out, “We are a union based on values, and we think that values are important.”
Asked if the Philippines is fulfilling the conditions for it to continue enjoying GSP+ status, Jessen replied, “What we have seen is that there has been good progress in some areas and less progress in other areas, so the picture is mixed.”
Pressed about the areas where “good” and “less” progress is being made, he said, “There has been good progress in labor conditions and the ILO (International Labour Organization) Conventions.”
As to how specific issues, such as the killing of teenagers and the initial drastic reduction of the Commission on Human Rights’ budget to P1,000, will affect the trade perks the Philippines enjoys from the EU, Jessen said, “These things happen in any system in any country. The important part, to me, is how are these things being addressed. Are they being addressed in a correct way? And, so far, on the two examples… the end of the discussion has been, as we see it, correct.”
The budget of the CHR was restored to a reasonable amount, while President Rodrigo Duterte said perpetrators of the killings would be brought to court and justice would be served, Jessen pointed out.
“The important thing is, to repeat, how are these different issues being tapped and addressed by the court system, by the legal system,” he stressed.
Ongoing dialogue with DTI
A report is being drafted and will be finalized early next year by the team that is monitoring how the different aspects of the agreement are being respected by the two sides, Jessen said.
There is ongoing dialogue with the Department of Trade and Industry on the GSP+, “So there will be no surprises for them in the final report as I see it, because we make sure that we have an ongoing dialogue,” the Ambassador added.
The EPBN also published the third edition of the EU-Philippine Advocacy Papers, which laid out the following top recommendations for the Philippines, according to EPBN Steering Committee Chairman Guenter Taus:
1. Open the Philippine economy to foreign investment in order to level the playing field and make goods and services more affordable to the Philippine public. Competition results in better prices and better basic services.
2. Develop infrastructure, as the government is doing in its “build, build, build” strategy.
3. Initiate tax reform.
4. Come up with incentives for countries investing in the Philippines.
5. Make it easier to set up businesses.
Taus also stressed the need to improve the education of tradesmen.
“I believe the current system in terms of educating skilled labor is nowhere near where it should be… I run an engineering company, and our biggest problem is to find the right talent. And it will be one of the major obstacles and hindrances to the Build, Build, Build program of the government,” he said.
The Philippines has good tradesmen, he said, but they are all out of the country. It is time for the government to bring them back, he added.