Washington, D.C.—The United States Generalized System of Preferences (GSP) was reauthorized on 23 March 2018, after President Donald J. Trump signed the Omnibus Spending Bill which included GSP renewal language.

The renewal authorizes the GSP through 31 December 2020 and includes a mechanism that refunds tariffs paid from 01 January 2018 through the reinstatement date of the program. In addition, USTR will be required to submit an annual report to the relevant congressional trade committees on Beneficiaries’ compliance with country-eligibility criteria.

Trade Secretary Ramon M. Lopez welcomed the reauthorization of the US GSP. “We wish to thank the US Government for the timely renewal of the GSP program, as Philippine exporters will continue to benefit from enhanced market access to the United States under GSP”.

The GSP program covers a total 5,057 products or tariff lines or roughly 47.7% of the 10,600 total US tariff lines: 3,500 of which are open for all Beneficiary Developing Countries (BDC) while an additional 1,500 products are given to the Least-Developed Beneficiary Developing Countries (LDBDC). Effective 1 July 2017, a total of 23 travel goods articles were added to the program.

Lopez said that the Philippines has enjoyed preferential duty-free entry to the US through the GSP program for a number of products. GSP exports account for 18% of Philippines exports to the US, valued at an estimated US$ 1.59 billion. Top GSP exports to the US include telescopic sights for rifles, spectacle lenses other than glass, new pneumatic radial tires of rubber, non-alcoholic beverages not including fruits and vegetables, and electrical machinery and equipment parts.

The recent approval of the GSP is a triple-win for developing countries, US companies, and American consumers, according to Sec. Lopez.

Meanwhile Trade policy Undersecretary Ceferino Rodolfo highlighted the importance of the US GSP in the face of a brewing trade clash among bigger countries. The Philppines utilizes all available tools to maintain—and even improve its preferential access to key markets. This is important not only in ensuring advantage for our exporters but equally critical, to heighten the Philippines’ advantage as location for manufacturing of these products.”

DTI officials cited that in the case of the US, in addition to the DTI’s advocacy for GSP market access, the Philippines stands ready to engage with US authorities to assist our exporters in the face of additional tariffs which the US may impose on certain products. “With respect to the US, the longer term goal is to negotiate and conclude a free trade agreement,” concludes Lopez. It will be recalled that in a recent testimony to the House Ways & Means Committee, US Trade Representative Ambassador Robert Lighthizer confirmed that US is considering an FTA with the Philippines.♦