Philippine garment exporters seek US tariff break

WASHINGTON, D.C: Philippine garment exporters and major American textile millers are pushing for United States legislation granting duty-free imports of Philippine-made garments that would mutually benefit these industries. Dubbed as “Save Our Industries Act of 2010,” the bill seeks to eliminate tariffs of certain Philippine-made garments that use American textiles and yarns for 10 years.

If passed into law, the bill will not only create jobs but also boost trade between the US and the Philippines, according to Ma. Teresita Jocson-Agoncillo, the executive director of the Confederation of Garment Exporters of the Philippines (CONGEP).

Immediate passage

Agoncillo told The Manila Times this week that immediate passage of the bill would provide a big boost for Filipino garment manufacturers and their American textile suppliers.

Citing CONGEP projections, she said that Philippine imports of American textiles would substantially increase from the current $13 million to $250 million in two years and $500 million in five.

“These figures may look small [compared to the huge US export bill] but they represent about 43-percent increase in US textile exports,” Agoncillo added.

She is in the US capital to seek legislators’ support for the bill.

More important, according to Agoncillo, was that the passage of the bill would open a market for the entry of US fabric into Asia, a market that is dominated by China and South Korea.

With duty-free tariff concessions, she said Philippine exports of apparel made from these US-made fabrics would also jump by an estimated $1.3 billion in two years and by $3 billion in five years.

“For our garments producers in the Philippines, there is a very strong sense of urgency involved here because of the dwindling levels of exports to the United States and the massive amount of jobs we’ve lost since the end of the garments quota system,” Agoncillo noted.

From $2.1 billion in 2006, Philippine garment shipments to America have shrunk to $1 billion in 2009, she said, adding that this resulted in the loss of some 400,000 jobs for the labor-intensive apparel manufacturing sector.

Speaking on the same issue, Romulo Manlapig, the Philippine commercial counselor to the US, said that because of the reciprocity and mutual-benefit provisions, the proposed Save Our Industries Act enjoys the strong support of major American textile mills as well as the American Apparel and Footwear Association, the National Retail Federation and the US Association of Importers of Textiles and Apparel or US-ITA.

Manlapig added that the proposed law also enjoys bipartisan support from American legislators as indicated by sponsors of the bills—members of the Republican and Democratic parties in both chambers of the US Congress.

‘Win-win’ legislation

“We have here a win-win piece of legislation, because it is good for both the United States and the Philippines—a bill that will certainly build upon the strong and long-standing historical ties between our two countries,” the commercial counselor said.

House Bill 3039 was introduced in the House on June 25, 2009 by Representatives Jim McDermott (D-Washington) and Brian Bilbray (R-California) and is co-sponsored by at least nine other members of Congress from both political parties.

Senate Bill 3170 was filed on March 25 by Senators Daniel Inouye (D-Hawaii) and Christopher Bond (R-Montana) with Sen. Daniel Akaka, also of Hawaii, as co-sponsor.

It is almost identical to the House version, but the Senate bill identifies specific tariff lines eligible for duty-free entry and includes penalties for abuse.

Like the House version, Senate Bill 3170 lists shirts, underwear, trousers, underpants, swimwear and coats made from cotton and man-made fibers as eligible for duty-free entry into the American market.

The measure also seeks to slash by half the tariff on Philippine-made garments that use textile sourced from other countries as long as the yarns come from the US.

Moreover, the bill grants duty-free treatment to a limited range of Philippine exports of “cut and sew” apparel products that are not produced in the US, which means that they will not adversely affect any American manufacturer.

When asked about the chances of the measure being passed this year, Agoncillo said, “We are keeping our fingers crossed, but we are hoping American lawmakers would be sympathetic to us and approve the bills.”

She pointed out that the support of the Filipino-American community is crucial, because they can persuade their congressman or senator to support the bills.

“We are reaching out to our fellow Filipinos for help,” Agoncillo said.

“NaFFAA [National Federation of Filipino-American Associations] has been very supportive and we hope we can generate the same kind of support the Filipino-Americans gave to the Filipino veterans [of World War II],” she added.

Heart-breaking sight

Agoncillo said that “it breaks my heart” to see so many garment factories closing and thousands of workers, most of them working mothers, losing their jobs because of the current slump in the garment industry.

Unlike other industries, she noted, garment manufacturers tap workers that have the least education, including the “tambay” or unemployed menfolk who hang around in street corners doing nothing.

“We train the ‘tambays’ for a few weeks to work for us—ironing garments or packing them,” Agoncillo said.

She added that for skilled needle workers, they usually train the women for four to six weeks to prepare them for full-time or piece work in the factories.

According to Agoncillo, Filipino garment makers are among the best in the world, sewing high-end product for known manufacturers and brands such as Ann Taylor, Victoria’s Secret, Tommy Hilfiger, Banana Republic and Gap, among others.

She said that it takes six months to train workers for the electronics industry, compared to just six weeks in garment making, adding that the garment industry is more labor-intensive than electronics. –JUN MEDINA, Manila Times