THE European Union (EU) has given certain Philippine exports a three-year extension on their preferential access to the European market based on the new 2009-2011 Generalized System of Preference (GSP) program that was recently approved by the European Commission (EC).

Ambassador Alistair MacDonald, head of the European Commission Delegation in Manila, said in a statement that “the Philippines will continue to benefit from either reduced-duty or duty-free entry for many products, and no sector will be graduated from GSP for the Philippines from 2009 to 2011.”

The Philippines is among the Top 20 users of the EU GSP scheme, with the Philippine GSP exports valued at €862 million in 2007, the highest since 1998.

The Philippine products covered by the GSP cover about 16 percent of the country’s total exports to the EU at €5.6 billion.

The country’s utilization rate of its GSP privilege is also at a high 56 percent in 2007.

The GSP is an autonomous trade arrangement through which the EU provides nonreciprocal preferential access to the EU market to 176 developing countries and territories. 

In 2007 developing countries exported €57-billion worth of goods under GSP, which resulted in duty loss for the EU of €2.5 billion. 

EU Trade Commissioner Peter Mandelson said the continuation of GSP will ensure stability and predictability for beneficiaries and traders in the EU and developing countries.

“GSP is a vital tool of our prodevelopment EU trade policy. In response to requests by users of GSP to ensure continued stability, predictability and transparency, the scheme remains broadly unchanged,” he said.

While the Philippines benefited, it will also be facing tougher competition for some of its products as EC also decided to give back the preferential market-access privileges to some competitors of the country in several products.

GSP privileges were restored for Algeria (mineral products); India (jewelry, pearls, precious metals and stones); Indonesia (wood and articles of wood); Russia (chemicals and base metals); South Africa (transport equipment); and Thailand (transport equipment).

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