PH garment exporters to petition EU over possible scrapping of tariff privileges

·2 min read

THE Philippine garment industry is preparing to petition the European Commission, asking it not to consider calls for the country to lose its Generalized Scheme of Preferences Plus (GSP+) access to European Union (EU) markets.

The call follows a resolution adopted by the European Parliament in late September calling on the European Commission to temporarily withdraw the Philippines’ access from the scheme because of human rights abuses.

Members of the European Parliament acted over what it regards as “the seriousness of the human rights violations” committed by the administration of President Rodrigo Duterte, who infamously encouraged extra-judicial killings of suspected drug dealers.

Access to GSP+ can be suspended if a country breaches a wide range of human rights conventions – such concerns, for instance, led to Sri Lanka losing this status in 2010 (it was restored in 2017).

Robert Young, trustee for the textiles, yarns and fabrics sector of the Philippine Exporters Confederation Inc. (Philexport) and the president of the Foreign Buyers Association of the Philippines (Fobap) said the clothing sector would resist a loss of GSP+ status.

It was planning an official communication to the European Commission, which would have to propose such a move. Fobap will also request an easing of origin rules that have prevented the Philippine clothing sector from making the most of this trade status, Young added.

The industry lacks local backward linkages, preventing it from purchasing enough fabrics and yarns locally that will help qualify it for GSP+ privileges.

“It is heartbreaking to see that garment-makers have no way of replacing imported inputs with locally made inputs and we are thus preparing a petition for the EU Commission,” said Young.

The GSP+ program grants the Philippines the benefit of exporting more than 6,000 products to any of the 27-EU member countries at zero tariff. Products on the list include textiles, garments, headwear, footwear, furniture and chemicals.

Young said the Philippines only exported apparel worth EUR100 million to the EU market in a 2019, a performance that it needs to improve to better cope with the Covid- 19 pandemic.

Latest data by the Philippine Statistics Authority painted a bleak picture, with industrial output of the country’s apparel and footwear sector and apparel volume-wise dropping by 35.7 percent year-on-year in August, much deeper than overall industrial output’s contraction of 13.8 percent.

Textile output declined by 25.1 percent- which would impede the clothing sector’s ability to meet local input rules associated with GSP+. (PHILEXPORT NEWS AND FEATURES)