The United Kingdom is considering some policy changes in its Generalized System of Preferences (GSP) from which Philippine exporters are expected to benefit the Department of Trade and Industry (DTI) said in an advisory.
The DTI said the UK aims to introduce a new, simpler, and more generous trade preferences scheme next year which will be called Developing Countries Trading Scheme (DCTS) replacing the GSP. This follows after the exit of the UK from the European Union from which the Philippines also enjoys a GSP Plus.
In its statement of direction on the GSP, the UK said it will introduce changes to the GSP scheme to improve access to the UK market for developing countries, including the Philippines.
Deemed as more generous, the new GSP scheme will simplify the Rules of Origin (ROO) requirements for least developed countries; reduce tariffs for low-income and lower-middle-income countries; amen the approach to goods graduation, which suspends preferential rates on particular goods from certain countries based on their competitiveness; amend the conditions and reporting requirements that enable a low-income or lower-middle-income country to benefit from more generous provisions through the Enhanced Framework; and simplify the conditions that could lead to variation or suspension of preferences for any beneficiary country.
The DTI has advised exporters to take part in the public consultations on these changes to provide inputs and suggestions, particularly on the relaxation of the current Origin requirements for their products.
“The overarching objective of the policy changes is to increase trade with beneficiary-countries thereby supporting their economic growth. An improved scheme will enable developing countries to export more to the UK and further integrate into the global economy, creating stronger trade and investment partners for the future,” the UK said.
It added: “ It will mean a better deal for developing countries so more can follow in the example of Bangladesh, or Vietnam, who have used trade to turbocharge growth, to raise living standards and drive down poverty. At home, greater access to imports from developing countries will reduce the costs and increase choice for UK businesses and consumers alike.”
The list of beneficiaries include 47 countries in the Least Developed Country Framework and 23 additional countries or territories classified by the World Bank as low income and lower middle-income countries.
The Philippines belongs to the Enhanced Framework with seven other countries. This framework is for countries that are classified by the World Bank as low-income and lower-middle income countries and are economically vulnerable due to a lack of export diversification and a low level of integration with the international trading system.
The Philippines under this framework must also implement 27 conventions relating to human and labor rights, the environment and good governance Imports from these countries have a nil rate of import duty on certain goods.
The UK is the Philippine’s 18th top export market, with average annual exports of $450 million. Top exports include tuna, desiccated coconut, abaca fiber, spectacle lenses, and semiconductors. – Irma Isip
