Increased trade with UK seen with planned FTA

A FREE TRADE agreement with the United Kingdom (UK) would be a “welcome development” for the Philippines as UK’s planned divorce from the European Union (EU) might make it “more generous” to future trade partners, the president of the Philippine Exporters Confederation, Inc. (Philexport) said.

“Because nag- Brexit sila (Since Britain exited the EU), I think they’re going be more generous to partners kung magkakaroon tayo ng FTA ( free trade agreement) sa kanila (if we’re going to have an FTA with them). They might allow us even more than what is allowed under GSP (Generalized Scheme of Preferences) and GSP+,” Sergio R. Ortiz-Luis, Jr., Philexport president, said in a phone interview on Aug. 28.

“While they are not one of our top exporters, any increase with them would be a welcome development because we’re lacking a lot of markets. Medyo mahina ang market (The market is a bit weak). So if they give us a preference, definitely it would be to our advantage.”

Under the GSP+ status, the Philippines was allowed tarifffree exports of over 6,000 local products to the EU since December 2014 under the condition that it would comply to 27 core international conventions that cover human and labor rights, environmental protection and good governance.

Prior to this, the Philippines was covered by EU’s regular GSP which accorded zero duty treatment on only 2,442 products and reduced tariffs for 3,767 products.

However, for the first half of the year, the Philippines was in a trade deficit with the UK, as local companies purchased $254.03 million worth of goods and services, a 47.8% boost from $171.89 million in the same period last year, but exported a total value of $230.72 million, falling 11.5% from $260.65 million, data from the Philippine Statistics Authority showed. Placing outside the top 10 exporters to the Philippines, UK is currently ranked 19th in terms of outbound shipments to the country as of June this year.

This comes as the head of the trade department and the British Prime Minister’s Trade Envoy to the Philippines said last week that both countries are looking forward to a bilateral trade which could allow the Philippines “more flexibility” to negotiate for more goods and services currently not included in its arrangement with the EU as a whole.

Department of Trade and Industry ( DTI) Secretary Ramon M. Lopez said, however, that the timing of the agreement would depend on when UK would actually trigger Article 50 of the Lisbon Treaty, which sets how an EU member could leave the bloc.