Noy pushes entry of RP garments to US duty-free

NEW YORK – President Aquino made a pitch for Philippine garments to enter the United States duty-free as he also sought the support of Washington for the Philippines’ bid to become a member of the Trans-Pacific Partnership, a multilateral free trade agreement formed with the objective of creating a platform for promoting economic integration among nations in the Asia-Pacific region.

“We are now advocating for the passage of a bill pending in the US Congress, known as the Save Our Industries Act or the SAVE Act. If signed into law, it would give duty-free breaks for Philippine garment exports to the US, which were processed from US-made fabrics. It would also give reduced tariffs on those that use US-made yarns,” Mr. Aquino said.

“This is a ‘win-win’ proposition for both the US and the Philippines. It will reinvigorate both the US textile industry and our garments industry and create jobs on both sides of the Pacific,” he said.

Based on reports, the bill will grant duty-free treatment to certain apparel products wholly assembled in the Philippines, provided that these are made from the US-made fabrics. Those produced from US-made yarns would be levied reduced tariffs.

In addition, the bill would grant US duty-free treatment to a limited range of Philippine exports of “cut and sew” apparel products that are not produced in the US and thereby deemed non-sensitive.

The apparel industry estimates that Philippine apparel shipments to the US – down from $2.1 billion in 2006 to $1-billion in 2009 – are estimated to recover to $1.32-billion by year two of SAVE’s implementation and to $3-billion by year five; US textile exports to the Philippines is estimated at $13.5-million in 2008, according to records from the Philippine government but at $20-million per US congressional records. These are mostly of fabrics for industrial use that will go up to $250-million by year two and to $500-million by year five.

While there are only 150,000 jobs that remain today from a high of 600,000 during the quota years – incremental job recovery in the apparel industry will reach 50,000 in year two, and 200,000 in year five.

On the US side, direct manufacturing job creation in the capital-intensive US.textile industry will also be generated by years two and five, respectively.

Meanwhile, Mr. Aquino has asked the US to help the Philippines in its bid to join TPP.

In a speech at the Council of Foreign Relations at the CFR Auditorium, Mr. Aquino said the country is “positioning” itself to join the TPP by laying out the tenets that will mark the new Philippines: good governance, employment generation, quality education, improved public health and a home for every family, within safe communities.

“With keen interest, we note the Obama administration’s focus in negotiating a regional Asia-Pacific trade agreement known as the Trans-Pacific Partnership Agreement,” President Aquino said.

“Envisioned as a platform for economic integration across the region, the TPP countries would be in a best place to become the region’s leading hub for trade, investment and growth,” he added.

Mr. Aquino pointed out that by being a member of the TPP, “the Philippines aims to engage the US in joint trade initiatives that would serve as mutual building blocks.”

“Just like other ASEAN (Association of Southeast Asian Nations) member-states, the Philippines is already positioning itself as a viable member of the Trans-Pacific Partnership,” the President said.

“We seek US support for this as we recognize its leadership role as host of the APEC (Asia-Pacific Economic Community) in 2011,” he added.

The TPP aims to eliminate 90 percent of all tariffs among member countries—Australia, Brunei, Chile, New Zealand, Peru, Singapore, United States, and Vietnam, by Jan. 1, 2006 and reduce all trade tariffs to zero by the year 2015.

It is a comprehensive agreement covering all the mainstays of a free trade
agreement, including trade in goods, rules of origin, trade remedies, sanitary and phytosanitary measures, technical barriers to trade, trade in services, intellectual property, government procurement and competition policy. –Aurea Calica (The Philippine Star)