Brussels Nod for GSP+ has multiple implications for Marcos

European Union will extend duty-free market access to Philippines and favored nations until end of 2027

By: Viswa Nathan

The release of the Philippines’ prisoner of conscience, Leila De Lima, last week (November 13) from almost seven years of detention has earned Manila a much-needed windfall. The European Commission has moved, in the wake of De Lima’s release and resulting jubilation within and outside the Philippines, to continue granting Manila the privilege of duty-free access to the 27-nation market.

As this nearly decade-long concession was to expire next month, Asia Sentinel asked the EU mission in Manila, before the court granted De Lima bail, if the EU would consider extending GSP+ “although the Philippines is far from complying with the 27 conventions relative to the protection of human rights, good governance, and sustainable development.”

If the European Parliament were to stand by the rules that GSP+ beneficiaries must meet the terms tied to the trade concession, the Philippines would surely not qualify. The country has had almost a decade to comply with EU conventions. Besides, it has been under EU monitoring for compliance since the second half of 2018. Still, gun violence with impunity continues to occur across the country, with public officials and journalists notable victims. Juan Jumalon, a radio journalist murdered early this month by gunmen who walked into his studio as he was livestreaming, was the fourth journalist gunmen killed since Ferdinand Marcos Jr assumed office, besides over 30 others, mainly public officials. The police recorded 105,568 crimes in the first 190 days of the Marcos presidency. However, no stern steps are taken to prevent the crimewave; and the country fell far short of the requirements needed to qualify for GSP+.

Hannah Neumann, a member of the European Parliament who led a delegation to the Philippines early this year, said parliament remained firm that whoever wants preferential access to the EU market must uphold social, environmental, and human rights standards. It’s “not going to go away.” Thus, the Philippines’ eligibility for the GSP+ privilege hung in the balance.

However, after mulling for a few days over Asia Sentinel’s query, the EU mission responded three days after De Lima walked to freedom. “The European Commission has proposed to the European Parliament and the European Council…the prolongation of the application of the current GSP regulation,” it said. This, the mission added, would also benefit all countries currently in the GSP+ scheme.

Although Manila was yet to measure up to the EU terms, especially in human rights and law and order areas, the EU mission said, evaluating the situation found that “while there are still topics that have to be discussed, issues that are important and are raised with the constant dialogue that the EU has with the Philippines, it can extend the status quo.”

The GSP+ privilege allows 6,274 Philippines products to enter the EU market duty-free. The concession helped increase Manila’s exports to the 27-nation union by several folds—skyrocketing from US$7.2 million in 2014, the year before Manila began benefiting from GSP+, to $11.17 billion in 2022.

So for the Marcos administration, the loss of GSP+ would be a debilitating blow, particularly when it is trying to uplift the country to upper middle-income status while also reducing trade and aid dependence on the superpower neighbor China that has become expansionist and aggressive. Manila has already given up on Chinese funding for three major transport projects.

These were among the issues that Manila pressed hard in its negotiations with Brussels, and President Marcos explained to the president of the EU Commission, Ursula von der Leyen, when she visited Manila in July. Those efforts seemed to have hit the right chord and gradually but steadily developed into a growing realization of the precarious position the Philippines is currently in and the damage the denial of GSP+ could inflict on the country’s economy and also the wider interest of EU member states.

Therefore, the need to stand with Manila, as do democracies in the Indo-Pacific—particularly the United States, Japan, Australia, South Korea, and India—gained sympathy. Besides, the EU’s practice has been incentivizing gradual progress through dialogue and monitoring, rather than withdrawing trade concessions.

EU’s move to prolong the GSP+ until 2027 will also benefit two other Asian countries—Pakistan and Sri Lanka—along with five others, namely Bolivia, Cape Verde, Kyrgyzstan, Mongolia, and Uzbekistan. The scheme is designed to help developing countries alleviate poverty and create jobs based on international values and principles like labor and human rights, environment and climate protection, and good governance. 

On the Philippines’ domestic front, meanwhile, considering who scratches whose back is a long-established factor in national politics, there is a lingering question in many minds about letting De Lima go free on bail. Was the court’s decision coerced by the Marcos administration, as some believe, for national intertest of convincing the EU on trade concession?

The truth may never be out; nonetheless, all available evidence suggests that impartial exercise of justice was at play, as De Lima, the former chairperson of the Philippine Commission of Human Rights, then the secretary of justice, and later senator, and finally the long-suffering prisoner of conscience, said as she walked out of detention into freedom.

In granting De Lima bail, Judge Gener Gito, who has a reputation for making unpalatable rulings, set aside the ruling Judge Juanita Guerrero issued in 2017 without granting a hearing to the defense motion to quash the Duterte administration’s petition—which De Lima’s lawyer, Alex Padilla, called a “pre-judgment” on the judge’s part—as well as the subsequent denial of bail in July this year by Judge Romeo Buenaventura. Judge Gito came to bear the burden of reviewing his fellow judges’ rulings and the entire case history only after two other judges inhibited from the case, and the case, when raffled out again, went to the court where he presided.

The EU continuing to grant the trade privileges for the next four years could go some way to help Marcos deliver on his promise to uplift the Gross National Income (GNI) per capita to the equivalent of US$4,256. But then, this is a country where success breeds more enemies than supporters. The UniTeam that helped Marcos rise to power with a substantial majority is disintegrating. The leader who masterminded the UniTeam, former president Gloria Macapagal-Arroyo, has been humiliatingly sidelined in the horse-trading that is common in the political power game. Duterte, who disparaged Marcos as a weak leader, has found a television service that grants him timeslot to harangue whenever he desires. Daggers are out, and Marcos has a lot to worry about in the remaining days of his presidency than feeling victorious and relaxed.

Viswa Nathan, formerly editor-in-chief of the Hongkong Standard, is a regular contributor to Asia Sentinel. He is now based in the Philippines.