MANILA – The government has scrambled to assure the European Union (EU) — which has criticized the human rights record of President Rodrigo R. Duterte — of the Philippines’ fitness to keep trade privileges it bagged more than two years ago as the bloc prepares to release its second biennial report on this matter in early 2018, according to a statement Wednesday of the Department of Trade and Industry (DTI).
The European Commission’s Final Interim Report on the Mid-Term Evaluation of the EU’s Generalized Scheme of Preferences, dated Sept. 20, voiced the bloc’s concern over Mr. Duterte’s “war on drugs” and the House of Representatives approval last March of a bill reviving the death penalty for drug-related crimes.
“This bill is a violation of Article 6 of the UN International Covenant on Civil and Political Rights,” that report read.
DTI said Trade Secretary Ramon M. Lopez and Philippine Special Envoy to the EU Edgardo J. Angara “urged the EU Parliament to further engage the Philippines through the expansion of the General[ized] Scheme of Preferences plus (GSP+) in a presentation at the EU Parliament and meetings with various trade institutions and parliament ministers” in Brussels, Belgium last Tuesday.
Mr. Lopez said separately in a text message that the Brussels meeting was “basically to ensure continuity of the GSP+ privilege” under The Special Incentive Arrangement for Sustainable Development and Good Governance.
“The benefits of GSP+ just started to be realized, as exports to EU for first half of 2017 grew by 36%,” Mr. Lopez noted in his text.
The DTI statement quoted Mr. Lopez as saying: “We want to follow through the dialogue on the expansion of the GSP+ and move to a long-lasting trade concession via free trade agreement.”
The Philippines bagged GSP+ status — which slashes to zero tariff rates on 6,274 exports to EU markets — on Dec. 25, 2014. GSP+ ranks now include seven other countries, namely: Armenia, Bolivia, Cape Verde, Kyrgyzstan, Mongolia, Pakistan and Paraguay.
Exchanges between Mr. Duterte and EU officials have been strained over the latters’ expression of concern about the government’s bloody war on narcotics since he assumed office at the end of June 2016.
In addition to standard GSP conditions, GSP+ requires interested economies to have ratified and observe 27 international conventions on human and labor rights, environmental protection and good governance.
“The country must not have formulated reservations which are prohibited by these conventions,” an EU primer read, adding that “monitoring bodies under those conventions must not have identified any serious failure to effectively implement them.”
The first GSP+ report, covering 2014-2015, was issued in January 2016, and the second one, covering 2016-2017, will be published “by the beginning of next year.”
The EU added in its primer that it “can withdraw standard GSP preferences in some exceptional circumstances, notably serious and systematic violation of fundamental human rights and labor rights conventions.”
In a July 12 meeting in Brussels on GSP+, representatives of “some civil society organizations expressed concerns about a worsening human rights situation, labor rights violations and the government’s hesitancy to address these issues in the Philippines.”
“Reference to revoking GSP+ preferences was made,” read the minutes of that meeting.
The mid-term evaluation report recalled that “[t]he EU responded to these developments by stressing the potential impact on its preferential market access.”
“The alleged cases of extrajudicial killings and the reintroduction of capital punishment will be taken into account in the GSP+ monitoring process and the review of the Philippines’ implementation of the GSP+,” the report read.
“In this respect, European Trade Commissioner Cecilia Malmström in March 2017 expressed the EU’s concerns about the abusive policies on drugs and warned that the country could lose its GSP+ preferences due to these human rights violations,” it added.
“Similarly, the European Parliament urged the Commission to take action and consider the withdrawal of GSP+ preferences if the situation does not improve.”
Philippine trade sector leaders last year downplayed the impact of a withdrawal of GSP+ privileges, saying it would be minimal.
The mid-term evaluation report noted that the Philippines shipped €213 million worth of goods to the EU in 2016, accounting for just 1.8% of total exports under GSP+. That year saw the Philippines ship 36.93% of its textile and clothing products under GSP+ last year. The country shipped a total of €6.2 billion worth of goods to the EU in 2016.
“The Philippines was the only significant GSP+ beneficiary country which exported under the scheme over the period…” the report noted, adding that “the Philippines has steadily increased exports under the GSP+.”
“The withdrawal from GSP+ would therefore increase the price of Filipino imports and decrease the country’s competitive advantage vis-à-vis other GSP+… beneficiaries,” it warned.
“This could have a substantial impact on the trade between the EU and the Philippines as the EU was the Philippines’ third largest export destination in 2016.”
DTI said yesterday that the “Philippine delegation… assured the EU that the Philippines continues to adhere to protecting human rights and the President’s zero tolerance for abusive enforcers.”
“There is clear rule of law and strong democracy in the country.”