Filipino businesses exporting textiles and garments, machinery, electrical and electronics, processed food, and agricultural products to the European Union (EU) need to meet relevant requirements to effectively tap into the export potential and benefit from the duty-free access available for these products.
According to the Business Guides on Exporting to the EU from the Philippines, these sectors are highly regulated in the EU and require significant efforts by exporters to comply with relevant measures, rules and instructions.
It said the EU is the second largest export destination of local textile and garments products after the United States.
But despite significant benefits from the EU’s Generalised Scheme of Preferences (GSP) scheme due to the margin vis-à-vis most-favored nation (MFN) tariffs, the sector’s utilization of the scheme is low largely due to difficult rules of origin requirements.
The guides said Philippine businesses have difficulty in meeting complex rules of origin.
In the EU, the textile and garments sector has specific rules on the use of chemical substances, the type of animal used for the manufacture of textile products, and restricted substances; and has instructions for labeling of such products, it added.
For machinery and equipment, certain products under this sector also have significant benefits from the GSP but the scheme’s utilization rates remain low.
The guides said the sector has specific rules on conformity assessment and safety requirements, such as protection against mechanical hazards; and specific rules for certain types of machinery, including technical standards for equipment and protective systems.
It also has instructions for marking and labeling of such products, it said.
For electrical products and electronics, the EU has specific rules including safety standards, marketing, energy efficiency, substance restrictions, and general product safety, it said.
The sector has also specific rules for certain types of electronic equipment, including substance restrictions for batteries; and has instructions for labeling of such products.
Electronic equipment and machinery account for the Philippines largest export sectors not only to the world but also to the EU. The electronic sector has dominated the country’s exports in the past decade.
Likewise, the processed food products sector in the EU has specific rules on import controls, contaminants in foodstuffs, maximum residue levels, plant protection and phytosanitary checks.
“It also has specific rules governing organic products and specific requirements for the labelling of such products,” the guides said.
It identified the top processed food exports from the Philippines to the EU market, including food preparations, prepared sauces, protein concentrates, and animal/vegetable fats and oils.
The International Trade Centre export potential analysis indicates that the processed food and animal feed has an export potential of about $1.6 billion, 49 percent of which is currently untapped.
Further, the agricultural products sector in the EU has specific rules on import controls, contaminants, maximum residue levels, plant protection and phytosanitary checks; and organic products.
It also has specific requirements for the labeling and packaging of such products, the guides added. – Press release