Doing Business with the European Union using the GSP+ ...

Doing Business with the European Union

using the GSP+ Scheme

15 October 2015

Agnes P. R. Legaspi

Assistant Director, Export Marketing Bureau (EMB), DTI

Industry Roadmaps and AEC Game Plan:

Roadmap Localization for Competitiveness in

Region 1VB

Outline

• The Philippine Strategy for Europe

• Generalized Scheme of Preference of the European Union (GSP)

• Maximizing GSP+ Benefits for PH Exports to EU

- Significance of GSP+ to PH

• PH – EU Trade Relations

• PH Export Opportunities and Challenges

• The EU Help Desk

Outline








Area: 10,181,000 square

kilometers or 3,837,000

square miles.

Population: ~ 741.2 million

people, which is the third

most populous continent

behind Asia and Africa

Highly industrialized

Philippine Strategy for Europe

Intensify Philippine trade engagements in the European region

through:

1.Maximum Availment of the EU GSP Scheme – PH has been accepted to

the GSP+ program

2.Pursuing the PH-EU FTA – PH and EU are still in negotiations to conclude

the scoping exercise

3.Negotiating a PH-EFTA FTA – PH and EFTA are done with the 3rd round

of FTA negotiations last September 2015

Outline








Generalized System of Preference (GSP)

GSP Donor Countries:

1. Australia

2. Belarus

3. Canada

5. Japan

6. New Zealand

7. Norway

8. Russian Federation

9. Switzerland

10. Turkey

11. United States

Generalized Scheme of Preference (GSP)

Preferential tariff treatment for select goods extended

by developed countries (“donor countries") to certain

developing and least developed countries (“beneficiary

countries")

Increase in export revenue

Export diversification

Job generation

Generalized Scheme of Preference (GSP)

GSP tariff preference is granted…

On a non-reciprocal basis (unilateral)

Under terms and conditions set by the donor (non-negotiated)

Eligibility requirement

Product coverage

Origin criteria and procedures

Time-bound, temporary (graduation)

The EU GSP SchemeAn autonomous trade arrangement under which EU grants non-

reciprocal trade preference to exports of beneficiary countries under the

ff. arrangements:

1. Regular GSP - Offers zero duty (non-sensitive) or 3.5 percentage

reduction on Most Favored Nation (MFN) tariff duties (sensitive);

- A special incentive arrangement for sustainable development

and good governance in the form of zero duties; and

3. Everything but Arms (EBA) - Offers duty-free and quota-free access

except arms and ammunitions

GSP

Beneficiaries

(as of January 2015)

1. Botswana

2. Cameroon

3. Colombia

4. Congo (Rep. of)

5. Cook Islands

6. Cote d’Ivoire

7. Fiji

8. Ghana

9. Honduras

10. India

11. Indonesia

12. Iraq

13. Kenya

14. Kyrgyzstan

15. Marshall Islands

15. Micronesia

16. Namibia

17. Nauru

18. Nicaragua

19. Nigeria

20. Niue

21. Sri Lanka

22. Syrian (Arab Rep.)

23. Swaziland

24. Tajikistan

25. Tonga

26. Turkmenistan

27. Ukraine

28. Uzbekistan

29. Vietnam

The EU GSP+ Scheme

GSP+ offers a larger coverage of

6,274 products, almost all

will be accorded zero duty.

GSP +

Beneficiaries


1. Armenia

2. Bolivia

3. Cape Verde

4. Costa Rica

5. El Salvador

6. Georgia

7. Guatemala

8. Mongolia

9. Pakistan

10. Panama

11. Paraguay

12. Peru

13. PHILIPPINES

The EU EBA Scheme

Everything but Arms (EBA) is a scheme that offers duty-free and quota-

free market access

• Available for least developed countries (low and lower-middle income)– Includes Lao PDR and Myanmar, Cambodia

• Coverage is 99% of all import products except arms and ammunition

• There is no graduation of products

EBA

Beneficiaries


AFRICA

1. Angola

2. Benin

3. Burkina Faso

4. Burundi

5. Central African Rep.

6. Chad

7. Comoros

8. Congo, Democratic Rep.

9. Djibouti

10. Equatorial Guinea

11. Eriteria

12. Ethiopia

13. Gambia

14. Guinea

15. Guinea-Bissau

16. Mauritania

17. Mozambique

18. Niger

ASIA

29. Afghanistan

30. Bangladesh

31. Bhutan

32. Cambodia

33. Lao PDR

34. Myanmar

35. Nepal

36. Timor-Leste

37. Yemen

PACIFIC

37. Kiribati

38. Samoa

39. Solomon Isl.

40. Tuvalu

41. Vanuatu

CARIBBEAN

42. Haiti

19. Rwanda

20. Sao Tome & Principe

21. Senegal

22. Sierra Leone

23. Somalia

24. South Sudan

25. Tanzania

26. Togo

27. Uganda

28. Zambia

Features Regular GSP GSP+

Coverage 6,209 tariff lines (CN 8-digit)

•Covers 2/3 of EU tariff lines

6,274 tariff lines (CN 8-digit)

•Covers 2/3 of EU tariff lines

•Inclusion of earth metals and lead products

Criteria Country is a developing or a least developed

country based on World Bank classification

1. Non-diversification of exports and low

proportions of EU imports; and,

2. Ratification and effective implementation of

27 international conventions on human and

labor rights, environment and governance

principles

Process Automatic By application

Tariff Preference Zero duty rate or 3.5 percentage reduction on

the MFN tariff rate

•2,442 tariff lines are subject to zero duty

•3,767 tariff lines are subject to reduced tariffs

Zero duty rate

No. of

Beneficiaries

29 countries as of Jan. 2015 13 countries as of Jan. 2015

Graduation Graduation – product and country eligibility No product graduation

Human Rights: Labor: Environmental Protection: Good Governance:

• Convention on the Prevention and

Punishment of the Crime of

Genocide (1948)

• International Convention on the

Elimination of All Forms of Racial

Discrimination (1965)

• International Covenant on Civil and

Political Rights (1966)

• International Covenant on

Economic, Social and Cultural

Rights (1966)

• Convention on the Elimination of All

Forms of Discrimination Against

Women (1979)

• Convention Against Torture and

other Cruel, Inhuman or Degrading

Treatment or Punishment (1984)

• Convention on the Rights of the

Child (1989)

• Convention concerning Forced or

Compulsory Labour, No. 29 (1930)

• Convention concerning Freedom of

Association and Protection of the Right to

Organise, No. 87 (1948)

• Convention concerning the Application of

the Principles of the Right to Organize

and to Bargain Collectively, No. 98

(1949)

• Convention concerning Equal

Remuneration of Men and Women

Workers for Work of Equal Value, No.

100 (1951)

• Convention concerning the Abolition of

Forced Labour, No. 105 (1957)

• Convention concerning Discrimination in

Respect of Employment and Occupation,

No. 111 (1958)

• Convention concerning Minimum Age for

Admission to Employment, No. 138

(1973)

• Convention concerning the Prohibition

and Immediate Action for the Elimination

of the Worst Forms of Child Labour, No.

182 (1999)

• Convention on International Trade

in Endangered Species of Wild

Fauna and Flora (1973)

• Montreal Protocol on Substances

that Deplete the Ozone Layer

(1987)

• Basel Convention on the Control of

Transboundary Movements of

Hazardous Wastes and Their

Disposal (1989)

• Convention on Biological Diversity

(1992)

• The United Nations Framework

Convention on Climate Change

(1992)

• Cartagena Protocol on Biosafety

(2000)

• Stockholm Convention on Persistent

Organic Pollutants (2001)

• Kyoto Protocol to the United

Nations Framework Convention on

Climate Change (1948)

• UN Single Convention on

Narcotic Drugs (1961)

• UN Convention on Psychotropic

Substances (1971)

• UN Convention against Illicit Traffic

in Narcotic Drugs and Psychotropic

Substances (1988)

• UN Convention against

Corruption (2004)

27 International Conventions

Outline




- - Significance of GSP+ to PH




Maximizing GSP+ Benefits for PH Exports:Significance of EU GSP to PH

PH exports expected to increase by 10.77% or €491.61 million in the first

year of availment

Products projected to significantly benefit from GSP+:

•Animal or vegetable fats and oils and byproducts (e.g. Coconut oil)

•Prepared foodstuffs (e.g. Prepared Pasta, Cashew Nuts)

•Textiles and textile articles (e.g. T-shirts, Shawls, Life Jackets)

•Footwear (e.g. Footwear with non-applied soles)

•Vehicles (e.g. Bicycles and parts)

267,000 new jobs expected to be created

Maximizing GSP+ Benefits for PH Exports:Significance of EU GSP to PH

Product MFN Regular GSP GSP+

Tuna 24% 20% 0%

Pineapple 20% 15% 0%

Bicycles 14% 10.5% 0%

Textiles & garments 12% 9.6% 0%

Footwear, headwear, umbrellas

16.9% 9.6% 0%

Outline








The EU operates

as a single

market

The Eurozone Area

19 EU member-states:

Austria, Belgium, Cyprus, Estonia, Finland, France, Germany,

Greece, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta,

Netherlands, Portugal, Slovakia, Slovenia and Spain

The EU Market

Will expand further to eventually include:

• Candidate countries – Albania, Iceland, Montenegro, Serbia, Macedonia, and Turkey

• Potential candidates – Bosnia and Herzegovina, and Kosovo

2014 EU Imports from ASEAN

$ 143.96 Bn

Source: ITC Trademap

http://en.wikipedia.org/wiki/File:Flag_of_ASEAN.svg

http://en.wikipedia.org/wiki/File:Flag_of_ASEAN.svg

EU-ASEAN Trade Relations

% Distribution of PH Exports By Key Markets

14.68 13.95

22.42 14.83

15.23 22.38

22.94 26.45

4.36 4.12 14.38 10.81

6.00 7.45

2010 $51.5Bn 2014 $62.1Bn

USA ASEAN Japan Greater China Korea EU28 Others

YEARTOTAL

TRADE

PH

EXPORTS

TO EU

PH

IMPORTS

FROM EU

BALANCE

OF

TRADE

2010 11,386 7,407 3,979 3,4272011 10,407 5,954 4,453 1,5012012 10,578 5,929 4,649 1,2802013 12,808 6,554 6,254 3002014 14,338 6,715 7,623 (908)

Ave. Growth

Rate

2010-20146.92% (1.00)% 17.82%

PH – EU Bilateral Trade RelationsUSD million

PH – EU Bilateral Relations

Significance of EU to the Philippines (2014 data):

4th largest trading partner ($14.34B), next to Japan ($19.15B),

China ($18.34B), and US (14.40B)

4th largest export market ($6.72B), next to Japan ($13.90B), US (8.66B), and China ($8.47B)

2nd largest import source ($7.62B), next to China ($9.87B)

IMPACT OF EU GSP+Philippine exports to EU in January-June 2015 amounted to $3.54 billion, an

increase of 7.51% compared to $3.29 billion exports in 2014 of the same period.

• medical/Industrial Instrumentation - 124.91%

• office equipment - 121.21%

• canned pineapple - 87.02%

• machinery and transport - 73.32%

• tobacco - 63.96%

• travel goods & handbags - 58.15%

• other fruits & vegetables - 48.67%

• Fish, shrimps/prawns - 11.34%

• coconut oil - 18.77%

Outline




- PH Application to the EU GSP+ Scheme





34

Source: Euromonitor International 2014

35

Source: Euromonitor International 2014

CONSUMER TRENDS AND OPPORTUNITIES

Social and environmental concerns

– On-going development that has gained solid ground.

– Western & Northern Europe are most aware consumers.

Eastern Europe pay less attention.

What does this mean for you as an Exporter?

– EU-wide Organic food label has been developed.

– Options for Fair trade/social certification are available for many

consumer products.

CONSUMER TRENDS AND OPPORTUNITIES

Health consciousness

– Increasing consciousness concerning health and well-being

What does this mean for you as an Exporter?

– Fish is considered healthy.

– Snack made of fruit or vegetable are healthier than junk food.

– Vegetable oils, dark chocolate, and light wines are increasing in demand.

– Food labelling and health claims are important marketing tool.

– Products geared toward hygiene or ergonomics fit this trend.

39

Concentration of PH Population in EU

Country No. of Overseas Filipinos

Italy 259,508

United Kingdom 200,987

Germany 55,309

Greece 51,656

Spain 51,268

France 50,013

Austria 29,824

Switzerland 22,431

What requirements should my products comply with to enter the EU market?

Sector: Processed fruits, vegetables, edible nuts

HACCPnitrate, aflatoxin, ochratoxin A,

patulin, heavy metals, salmonella, pesticides, plastics, insects

additives and flavorings

nutrition and health claims, allergens

Global Food Safety Initiative: IFS, BRC, FSSC22000, SQF

source: cbi.eu

What requirements should my products comply with to enter the EU market?

Sector: Metal parts and components

REACH

ISO 9001

ISO 14001

CE-marking, ISO or EN standards

source: cbi.eu

Outline








• The EU Export Helpdesk is a free online database that provides

information on EU’s trade regulations:

1. Preferential Tariff Rates

2. Market Requirements

3. Trade Statistics

EU Export Helpdeskhttp://exporthelp.europa.eu

http://exporthelp.europa.eu

EU Export Helpdesk

Main Webpage of the

EU Export Helpdesk– Main sections:1. My Export

2. Requirements

3. Tariffs

4. Preferential Arrangements

5. Statistics

– Helpful links:6. User Guide

7. Glossary

EU Export Helpdesk

My Export– Primary tool of the Export

helpdesk

– Four (4) blanks to fill-in:

1. Product Code

2. Country of Origin

3. Destination Country

4. Simulation Date

EU Export Helpdesk

Requirements– Contains Information on

procedural, documentary and sectoral requirements of the EU

EU Export Helpdesk

Tariffs– Basic definitions and

concepts of EU tariff related issues such as:

1. Binding Tariff Information

2. Duty Relief and Suspensions

3. Quotas

4. Antidumping

EU Export Helpdesk

Preferential

Arrangements-Shows the countries

that have

Preferential trade

agreements with

the EU

EU Export Helpdesk

Statistics- Contains trade flow

data between EU

Member States and

the rest of the world

So again, what is

EU GSP+ ?

52

Gawa Sa ‘Pinas…. and more!

53

Galing Sa ‘Pinas…. and more!

EU GSP+ is…

ICINGON THE

CAKE

Maximizing GSP+ Benefits for PH Exports:Cooperation and Outreach

For more information on the EU GSP+:

Philippine Trade and Investment Center

(PTIC)

BUREAU OF INTERNATIONAL TRADE

RELATIONS (BITR)

EXPORT MARKETING BUREAU (EMB)

Avenue Louise 207 -Bte 5

1050 Brussels, Belgium

Department of Trade and Industry

International Building

4F, 375 Sen. Gil Puyat Avenue,

Makati City

Department of Trade and Industry

International Building

GF & 2F, 375 Sen. Gil Puyat Avenue,

Makati City

Tel.: (+322) 6494400

Fax.: (+322) 6498940

Email: [email protected]

[email protected]

[email protected]

Tel.: 4653300 loc. 422

Fax.: 8905149


Tel.: 4653300 loc. 222

Fax.: 8904716


- Thank You -

Doing Business with the European Union using the GSP+ ...

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