Manila, Philippines – Philippine exports under the Generalized Scheme of Preference (GSP) will continue enter the United Kingdom (UK) tariff-free this year, through its own GSP. The UK GSP replicates the market access and benefits provided by the European Union GSP (EU GSP). The Philippines is included in the UK GSP’s Enhanced Framework, the counterpart of EU GSP+.
UK’s Foreign Commonwealth and Development Office held a virtual briefing on 11 February 2021 to explain the new tariff scheme. They shared that the Philippines had a 75% utilization rate of its benefits in 2019, with nuclear machinery and appliances as the top export products.
“The Philippines considers the United Kingdom as one of its major trading partners. We appreciate the inclusion of our country in the UK GSP and we are looking forward to resuming trade under this system,” said DTI Undersecretary Abdulgani Macatoman.
The UK left the EU on 31 January last year. To transition, the two parties agreed on trade and travel rules that would apply on 1 January 2021. The Philippines is currently one of the beneficiaries of the EU GSP+, providing 0% tariff for more than 6,000 products or two-thirds of its tariff lines. Zero-tariff products include bananas, tuna, pineapple, and footwear.
Under the Enhanced Framework, the Philippines still receives zero tariffs on two-thirds of its product lines. The UK GSP also requires compliance to the same 27 international conventions as the EU GSP+. To qualify for the UK GSP benefits, exporters need to fill out the GSP Form A and provide a Certificate of Origin.
The UK does not have an agreement with the EU to redistribute goods between their territories, post-Brexit. Goods simply traveling in between these places should meet the non-manipulation or non-alteration rules set by both territories.
The UK was the Philippines’ 17th trading partner and 18th export market in 2020. Exports to the UK amounted to around US$ 404 million in 2020, a 20% decrease from around US$ 506 million in 2019. Top export products to the UK in 2020 were pulp from waste paper, tuna, semiconductors, and integrated circuits.
Meanwhile, the DTI-Export Marketing Bureau (EMB) is promoting the following products and services for export to the UK: manufacturing components, apparel, processed and specialty food, and Information Technology and Business Process Management (IT-BPM).
“One of the strategies of the DTI-Trade Promotions Group (TPG) is to maximize our free trade and preferential trade agreements. We are ready to assist exporters for a seamless transition to the UK GSP+,” said Macatoman.
The DTI-EMB assists exporters in the documentation needed to qualify for the GSP+. Interested exporters can email mid@dti.gov.ph. For more information about the UK GSP, visit https://www.gov.uk/guidance/use-the-generalised-scheme-of-preferences-to-import-and-export-goods. ♦
Date of release: 26 February 2020