28 March 2018
Published also in Business Mirror
THE Department of Trade and Industry (DTI), through its Export Marketing Bureau (EMB), urged Philippine exporters to maximize the US Generalized System of Preferences (GSP) privilege, which has been extended until December 31, 2020, with the signing of the US Consolidated Appropriations Act, 2018 on March 23. The previous US GSP program expired at the end of 2017.
“The extended US GSP, which promotes economic growth and development in developing countries through the grant of preferential and duty-free entry of goods to the US market, stands to benefit existing exporters to the US, as well as those who are looking at the US for their market expansion,” EMB Director Senen M. Perlada said.
The Philippines is a beneficiary of the US GSP, which gives zero or reduced tariffs to a total 5,057 products, or 48 percent of the 10,600 total United States tariff lines. Of these, over 3,500 are available to all beneficiary developing nations, while least-developed countries can ship an additional 1,500 products without duty.
On July 1, 2017, under the special trade-preference program, the coverage of the US GSP expanded to include travel goods, which added 23 new tariff lines, such as trunks, suit cases, vanity and attaché cases; handbags; and travel, sports and similar bags. With the inclusion of travel goods, marked improvement was seen in this sector’s export performance, with Philippine exports of leather trunks, suit cases and executive cases increasing by 589 percent, from only $13.77 million in 2016 to $94.94 million in 2017.
Similarly, exports of handbags of other materials increased by 495 percent, from $11.45 million to $68.19 million.
With the renewal of US GSP this year, it is expected Philippine exports to the US would further increase.
In 2017 the Philippines’s total exports to the United States amounted to $9.2 billion, making it the country’s second-biggest market after the combined markets of China and Hong Kong.
GSP exports account for about 18 percent of Philippine exports to the US, valued at $1.59 billion.
Top GSP exports to the United States include telescopic sights for rifles, spectacle lenses other than glass, new pneumatic radial tires made of rubber, nonalcoholic beverages not including those from fruits and vegetables, and electrical machinery and equipment parts.
The extended US GSP includes a mechanism that refunds tariffs paid from January 1.
In addition to the DTI advocacy of GSP access, the Philippines also aims to negotiate and conclude a free-trade agreement with the US.
The link to the US GSP-eligible products can be found at http://tradelinephilippines.dti.gov.ph/web/tradeline-portal/quick-links.