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Trade deal with EU rests on standards

by September 25, 2017 General

WHILE a free trade agreement (FTA) between the Philippines and the European Union (EU) is under negotiation, a trade adviser reminded exporters to heed international labor and environment standards.

The reminder came from Walter van Hattum, head of the economic and trade section of the EU delegation, who observed the continuing poverty in the country amid economic benefits of the Generalized Preferences Scheme Plus (GSP+). At least 6,000 Philippine products exported to EU now enjoy zero tariff, as part of an arrangement that was supposed to boost employment and help relieve poverty.

“We don’t really want trade per se, we are not just into creating jobs that don’t pay well…We don’t want to trade products that destroy the environment,” van Hattum said in his visit to Cebu City last week.

As an example, the official cited the case of General Santos’s tuna industry, where the Department of Labor and Employment (DOLE) in 2015 found some labor violations, such as labor-only contracting (endo), and subjecting workers of tender age to hazardous working conditions.

Tuna is one of the thousands of products for export to Europe that enjoy zero tariff under the GSP+ incentive.

“When the Philippines applied for it (GSP+), you signed up a binding agreement to make a dialogue on it and (sign) conventions, not related to trade as such, but basically political conventions that we both signed in the areas of labor, environment, human resource, and governance. That is the conditionality of the GSP+. We are having that for two years,” he said.

This trade incentive scheme is EU’s way of helping developing countries rise out of poverty, and will end once a country like the Philippines reaches the “upper middle-income” level. (It is currently in the lower-middle income category.)
Van Hattum cautioned, “We don’t want to have an FTA unless there are provisions that labor conditions can be discussed between the economies.”

“We no longer conclude FTAs with countries that do not sign the Paris Agreement (on Climate Change),” he added.

While President Rodrigo Duterte previously lashed out against the agreement, calling it “stupid” and “unfair,” he signed it early this year. Obligations include a conditional commitment to reduce emissions by 70 percent below projected levels by 2030.

Early this year, EU Ambassador Franz Jessen called for the implementation of the Philippine-Europe FTA to expand trade opportunities. Only Singapore and Vietnam in Southeast Asia have concluded an FTA with Europe. Indonesia and the Philippines are working on similar agreements.