Department of Trade and Industry (DTI) Secretary Ramon Lopez welcomed the approval of the Office of the United States Trade Representative (USTR) to include Philippine travel goods in its expanded General System of Preferences (GSP) scheme.
Effective 1 July 2017, all US GSP Beneficiary Developing Countries will enjoy duty-free treatment for a number of its travel goods exports to the US. The new GSP program included 23 tariff lines, allowing travel goods such as apparels, bags, wallets and backpacks, luggage, and sport and travel bags made in the Philippines to enter the US market duty-free.
Sec. Lopez pushed for the Philippine advocacy of GSP inclusion and had consistently taken this up with counterparts from the USTR.
“This expansion will boost the local manufacturing industry and eventually provide more employment opportunities for Filipinos, creating 70,000 new jobs and increasing our GDP to 0.5 percent,” he said.
According to the US International Trade Center (ITC), the US imported an estimated total of USD 232 million from the 23 tariff lines of travel goods from the Philippines in 2016, making the country the fifth largest import source of travel goods in the US.
With the new GSP scheme, the duty-free treatment could increase Philippine travel goods exports to the US by USD 100 million annually for the first five years.
“The inclusion of travel goods into GSP will certainly provide benefits to our exporters, particularly micro, small, and medium enterprises (MSMEs) and export-oriented agri-businesses utilizing banana and other vegetable fibers and community based industries in the various regions of the country,” DTI Undersecretary Ceferino Rodolfo said.
Meanwhile, DTI Undersecretary Nora Terrado concurred, noting that maximizing market access opportunities from preferential agreements and arrangements such as GSPs and free-trade agreements (FTAs) are an important pillar of the Philippine export strategy as embedded in the Philippine Export Development Plans (PEDPs).
She added that “DTI will sustain and strengthen its advocacy campaign thru the Doing Business in Free Trade Areas (DBFTA) Program to ensure that Philippine exporters use this access and generate jobs.”
Confederation of Garments Exporters of the Philippines (CONGEP) Executive Director Maritess Agoncillo said the decision of the US government was an outcome of the joint efforts of the Philippine government and the private sector to strengthen the Philippine position on pushing for GSP for travel goods.
Sec. Lopez added that he “looks forward to this positive development as a much needed push for expanding employment opportunities and improving countryside development. This will also help contribute to the Duterte administration’s thrust of pursuing inclusive and sustainable growth thru job generation and entrepreneurship.”
The US GSP seeks to promote economic growth and development in developing countries through preferential and duty-free entry to the US market of products from 122 designated beneficiary countries and territories, including the Philippines.
In 2016, the US was the Philippines’ third major trading partner, the second biggest export market, and third top import supplier. A number of US companies are currently manufacturing travel goods in the Philippines, including Coach, Tory Burch, and Michael Kors.