Tuesday, December 7, 2021
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PH exports to UK to remain tariff-free

  • Philippine exports under the EU Generalized Scheme of Preference Plus (GSP+) scheme will continue to enter the UK tariff-free this year despite Brexit
  • The Philippines is included in the GSP Enhanced Framework of the UK, its counterpart to the EU GSP+ scheme
  • The UK GSP replicates the market access and benefits provided by the EU’s GSP+
  • Under the UK’s GSP Enhanced Framework, two-thirds of Philippine product lines will still receive zero tariff

Philippine exports under the European Union’s (EU) Generalized Scheme of Preference Plus (GSP+) scheme will continue to enter the United Kingdom (UK) tariff-free this year despite the UK’s exit from the trading bloc, according to the Department of Trade and Industry (DTI).

DTI in a statement said the Philippines has been included in the UK’s GSP Enhanced Framework, the European country’s counterpart to the EU GSP+ scheme. The UK GSP replicates the market access and benefits provided by the EU’s GSP+ scheme.

The UK GSP Enhanced Framework is for countries that are classified by the World Bank as low-income and lower-middle income countries. It also requires beneficiary countries to implement 27 conventions relating to human and labor rights, the environment, and good governance.

“The Philippines considers the United Kingdom as one of its major trading partners. We appreciate the inclusion of our country in the UK GSP and we are looking forward to resuming trade under this system,” trade undersecretary Abdulgani Macatoman said.

The UK officially left the EU on January 31, 2020 after voting to leave the bloc in 2016. The UK and the EU agreed on a one-year transition period before new trade and travel arrangements between them would start on January 1, 2021.

The Philippines is currently one of the beneficiaries of the EU GSP+, the program that provides 0% tariff for more than 6,000 Filipino products, or two-thirds of the country’s tariff lines. Zero-tariff products include bananas, tuna, pineapple, and footwear.

During a recent virtual briefing of the UK’s Foreign Commonwealth and Development Office, it noted that the Philippines had a 75% utilization rate of its benefits in 2019, with nuclear machinery and appliances as the top export products.

Under the UK’s GSP Enhanced Framework, the Philippines will still receive zero tariff on two-thirds of its product lines.

To qualify for the UK GSP benefits, exporters need to fill out the GSP Form A and provide a Certificate of Origin.

DTI noted that the UK does not have an agreement with the EU to redistribute goods between their territories post UK’s exit, called Brexit.

Goods simply traveling in between these places should meet the non-manipulation or non-alteration rules set by both territories, it said.

The UK was the Philippines’ 17th trading partner and 18th export market in 2020.

Philippine exports to the UK amounted to around UK$404 million in 2020, a 20% decrease from around $506 million in 2019 amid COVID-19 pandemic.

Top export products to the UK in 2020 were pulp from waste paper, tuna, semiconductors, and integrated circuits.

The DTI-Export Marketing Bureau, meanwhile, is promoting manufacturing components, apparel, processed and specialty food, and information technology and business process management as products and services for export to the UK.

“One of the strategies of the DTI-Trade Promotions Group is to maximize our free trade and preferential trade agreements. We are ready to assist exporters for a seamless transition to the UK GSP+,” Macatoman said.

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