THE European Union’s (EU) lifting of the “yellow card” warning for the Philippines will pave the way for the country to boost its export of marine products—a top export commodity to the EU—estimated to be worth at least $300 million, a trade official said on Saturday.
With the deterrent out of the way, the country can now maximize the country’s use of EU’s preferential trade scheme, the Generalized System of Preferences Plus (EU-GSP+), under which marine products can enjoy 0-percent tariff.
“The lifting of the yellow card ensures that the Philippines can meet its inclusive growth objective in the EU GSP+ because a critical sector—the fisheries sector—will benefit from the market access through the EU-GSP+. This is relevant, since a number of players in the fisheries sector are in Mindanao,” Assistant Secretary for Industry Development Ceferino S. Rodolfo said at the sidelines of an event organized by San Miguel Corp.
In June of 2014, the European Commission slapped a yellow card against the Philippines, a warning that it is not doing enough to comply with rules governing illegal, unreported and unregulated (IUU) fishing.
Although the warning did not entail any immediate effects on trade, the EU Commission warned that, if not addressed, the Philippines may face trade sanctions on its marine exports to the EU.
This posed a serious challenge to the Philippines, as the EU is the top market for local marine and aquaculture products, accounting for 28.5 percent of global Philippine marine exports.
The IUU regulation’s scope was vast: It covers 94.1 of Philippine exports to the EU. Its value, under the regular GSP, was estimated at $300 million in 2013.
In December last year, the Philippines hurdled qualifications for the EU-GSP+, a preferential trade scheme that allows the country to enjoy duty-free privilege on 6,274 product lines exported to the EU, a wider coverage compared to a previous GSP scheme that only covered 6,209
products, majority of which only had preferential trade margins privilege.
Marine products had a 4.0-percent to 20.5-percent preferential trade margin in the previous scheme. “This is also a testament that the Philippines is a conscientious trade partner,” Rodolfo said.
The Philippines is expected to enjoy the EU-GSP+ scheme for six to seven years or up until it graduates from its level as a lower-middle income country, which has a threshold of a GNP per-capita income of $ 4,000.00 .
When the Philippines goes beyond this level, or becomes a upper-middle income country, it can no longer enjoy the EU-GSP+.