The European Parliament’s proposal to impose sanctions on the country by taking away tariff privileges will not push through in the same way as similar threats were dismissed so many times in the past due mainly to Philippine government interventions.
Lopez in a remote interview said he doesn’t see the sanctions coming to pass since the EU Parliament is not the body that impose sanctions but the European Commission.
The EU provides emerging economies including the Philippines with scheme so-called generalized system of preference plus (GSP+) privileges that primarily allows tariff-free entry of exports.
“There is no reason for them to withdraw the GSP+. The European Commission is the one that runs the GSP+ privilege and not the EU Parliament. The EU commission has the system of monitoring countries that submit on compliance to I think 20 plus international conventions that we signed for,” according to Lopez.
The Department of Trade and Industry (DTI) chief noted that since the country has been faring well in terms of providing correct and factual information to the EU Commission, there is no indication of penalties from the economic bloc.
“So far we’ve been faring well where we are able to explain all issues that are raised every year and this is I think the third or 4th time that the EU Parliament has passed a similar resolution. Every year, however, we were able to give our side and explanation, give correct information and numbers. This should address the same as well,” he added.
Lopez also noted the EU Commission does not apply sanctions immediately and go through processes before implementing such endorsement.
“It is a big process of monitoring. They conduct monitoring visits and we accept their visits and answer all their questions. This is not the first time that this happen so we are addressing this. Everything is hypothetical,” Lopez explained.
The DTI chief has underscored the Philippines current GSP+ status and EU’s contribution to the economy, being the country’s 4th largest trade partner in 2019 that accounted for about nine percent of total trade.
“As you know the current export to EU is about 7.3 billion Euros. About 2.7 percent would be eligible for GSP+. We are able to place exports under GSP+ about 2 billion euros. Also there’s a good utilization rate for products that are eligible for GSP+. So that’s the magnitude of exports to EU right now,” Lopez said.
Gov’t mediation sought
The controversy alarmed local firms which exports to the economic community through the use of GSP+ perks. Groups including Trade Union Congress of the Philippines, Philippine Exporters Confederation Inc., the European Chamber of Commerce of the Philippines, and the Management Association of the Philippines also worried about the adverse impact of EU sanctions on local businesses.
These groups together called the attention of the government for serious intervention, as the looming sanction might affect their exports and the economy as a whole.
The GSP+ is a trade preference that allows for the duty-free entry of 6,274 Philippine products into Europe.
In return, the Philippines must commit to effectively implement 27 international core conventions covering labor rights, human rights, good governance and environmental concerns.
Last 17 September, the EU Parliament voted an overwhelming 626 against seven, with 52 abstentions, to approve a resolution to remove the Philippines’ trade benefits, due to the “seriousness of the human rights violations in the country.”