DTI, export exec downplay GSP+ fallout

January 09, 2017 News

Source: Business World Online

THE COUNTRY will just have to “take” the fallout from President Rodrigo R. Duterte’s bloody war on crime, even if it means losing a perk that grants zero tariff on over 6,000 Philippine products sold to European Union (EU) markets, the heads of the Trade department and of the country’s main group of exporters said.

Secretary Ramon M. Lopez, who heads the Department of Trade and Industry (DTI), told reporters last Jan. 4 that EU’s revocation of the Philippines’ Generalized System of Preferences Plus (GSP+) status could be the price the country will have to pay should it revive the death penalty.

“I would just tell them (proponents of the move to bring back capital punishment) that there is an economic impact, but in the end we’d have to weigh it with the political, peace and order, and security impact,” Mr. Lopez said.

“If the President, the Cabinet cluster and maybe legislators would in the end bring that back -- after a thorough deliberation of pros and cons -- then I won’t argue,” he added.

“In other words, I’d take it despite saying the economic impact.”

At the same time, Mr. Lopez said he still hopes the EU will be flexible in its GSP+ requirements.

The regular GSP covers a total of 6,209 Philippine products, 2,442 of which are subject to zero duty while 3,767 have reduced tariffs. In comparison, GSP+ grants 6,274 other products zero duty.

But bagging privileges under GSP+ was contingent on Philippine ratification of 27 international conventions on human and labor rights, environmental protection and good governance as well as their implementation.

“If to maintain peace and order and improve security conditions sa ating bansa (in our country), if bringing back the death penalty is the solution, I would go with it kung ‘yun ang makakabuti sa (if that is in the best interest of) overall peace and order,” Mr. Lopez said.

“With that, I would then justify and maybe request those partner countries giving GSP+ to give us the flexibility if this is what is needed in the country.”

The Philippines ratified in 1986 the United Nations’ International Covenant on Civil and Political Rights (ICCPR), which binds parties to ensure basic freedoms like expression and religion, as well as from cruel punishment.

Then in 2007, the country did the same with ICCPR’s Second Optional Protocol that committed signatories to support efforts to abolish the death penalty.

More than a decade has passed since the death penalty was abolished through Republic Act No. 9346, enacted in June 2006.

Mr. Duterte now wants to bring back capital punishment as a crime deterrent.

A bill on this matter was approved by the justice committee of the House of Representatives last month. Lawmakers will push plenary approval when they return next week from their Christmas and New Year break.

Ifugao Rep. Teddy B. Baguilat, one of the bill’s critics, said in a text message yesterday that Mr. Lopez should discuss how the death penalty could affect the country economically, adding this risk “should weigh a lot in our legislators’ minds.”

Mr. Lopez has said that Mr. Duterte’s Cabinet is aware of this economic risk, but “in the end it’s a decision of what is really essential.”

Asked to comment, Sergio R. Ortiz-Luis Jr., president of the Philippine Exporters Confederation, Inc., said in a telephone interview yesterday that the country could do away with the GSP+.

Ang opinion ko rin diyan is I think we need the death penalty. Well, kung ime-maintain ng GSP+ ‘yung condition na ‘yan, then so be it.”

“I don’t think they will take it away because of that kasi unang-una tayo lang halos ang nandun, wala nang iba (because we are practically the only major emerging economy on the list of beneficiaries.) Pag tinanggal pa tayo, wala na silang ipagmamalaki sa GSP+ na ‘yan. (If the EU removes us from the list, it will have little else to show for GSP+).”

The few other GSP+ beneficiaries include Armenia, Bolivia, Cape Verde, Ecuador, Guatemala, Kyrgyzstan, Mongolia, Pakistan and Paraguay.

Mr. Ortiz-Luis, who recalled that he was one of the officials who initially pushed for GSP+ status, said that the grant looked good “on paper” but otherwise lacked actual benefits.

Hindi gaano malaki ‘yung mga produktong apektado ng GSP+. Maganda lang sa papel, pero in actuality, hindi naman na-avail ng mga exporters natin (Products affected by GSP+ are not major ones. GSP+ looks good on paper, but in actuality, our exporters were not able to avail of it),” he said.

Initial data from the Philippine Statistics Authority, to be sure, seemed to bare GSP+ benefits.

Philippine merchandise export sales to EU increased 2.6% in 2014 -- the year the country had only regular GSP status -- to $6.73 billion from $6.55 billion in 2013, PSA data showed.

A full year with wider access for exports saw a 6.8% jump to $7.17 billion in 2015 from 2014’s downward-revised $6.71 billion.

But the 10 months to October last year saw a 4.6% annual decrease to $5.69 billion.

The head of the European Chamber of Commerce in the Philippines (ECCP) had a different view on the matter.

ECCP President Guenter Taus told BusinessWorld in an e-mail yesterday that “only time will tell” if the EU would withdraw GSP+ benefits should the Philippines revive capital punishment.

“However, should it indeed happen, it would be a great loss for the business community and the country by and large, for the loss of free trade of over 6000 products is not easily overcome nor easily acceptable to businesses,” Mr. Taus said.

“We are more than ever under the belief that law and order should be primarily addressed by inclusive growth, namely: job creation,” he added.

“It has been proven by multiple countries all around the world time and again that law and order restoration (or maintaining such) does not need to come at the expense of the economy, but both should rather complement each other.”

In December, officials of the Commission on Human Rights (CHR) and the United Nations asked Congress to honor ICCPR’s Second Optional Protocol, which would be breached with enactment of the death penalty law. High Commissioner for Human Rights Zeid Ra’ad Al Hussein said in a Dec. 6 open letter that the protocol does not have an opt-out provision, flagging that enactment of the death penalty law would constitute a clear violation of the Philippines’ international commitment in this regard. Such a violation, CHR Commissioner Karen Lucia S. Gomez Dumpit has warned, would “negatively affect” the country’s GSP+ status.