DTI wants EU to ease rules on garments exports

Louella Desiderio (The Philippine Star) - April 19, 2021 - 12:00am

MANILA, Philippines — The Department of Trade and Industry (DTI) will ask the European Union to allow Philippine garment exports to use imported fabric or textiles under the bloc’s trade preference scheme.

During a webinar organized by the Philippine Exporters Confederation Inc., Trade Assistant Secretary Allan Gepty said the agency is working on a request for derogation with the EU so the country’s garment exports that use imported materials would be included in the Generalized Scheme of Preferences Plus (GSP+).

Under the EU GSP+, 6,274 products from the Philippines can enjoy duty-free entry to the bloc if these products originate from the country.

For Philippine garment exports to qualify for the zero duty, the EU requires the use of locally made fabric or textiles.

Gepty said the country’s garment exporters face difficulty in complying with the requirement given limited sources of raw materials.

“For example, most of the raw materials are being sourced from China and under GSP+ rules in the EU, this will not qualify if your inputs will come from China,” he said.

For the country to be given a lenient rule on the EU GSP+, he said a request to invoke derogation would have to be made.

Asked for a timeline on when the request for derogation would be made with the EU, he said in a text message “maybe second to third quarter.”

Earlier, Foreign Buyers Association of the Philippines (FOBAP) president Robert Young said the FOBAP, along with other groups involved in the garments industry such as Garment Business Association of the Philippines, Confederation of Wearable Exporters of the Philippines, Textile Mills Association of the Philippines, and Textile Producers Association of the Philippines, have made a request to the DTI to ask the EU to invoke derogation under the rules of GSP+.

Should the request for derogation be successful, Young said the country would be able to ship $100 million worth of additional exports to the EU.

Apart from a request for derogation, Gepty said the DTI would also continue its push for a free trade agreement (FTA) with the EU.

“Noting that our GSP+ preference would end in December 2023, in parallel, we are also pushing for a Philippines-EU FTA. With an FTA, it is more stable,” he said.

Two rounds of negotiations have been conducted for the EU-Philippines FTA. The first round was held in May 2016, and the last one in February 2017.

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