Palace lobbies for duty free garment exports to America

Seizing the goodwill generated by his recent visit to the United States, President Benigno Aquino 3rd is strongly lobbying for the immediate passage of US legislation intended to boost the US textile industry and the labor-intensive Philippine garment industry. The Aquino administration hopes the pending US bill, “Save Our Industries Act of 2010” or SAVE Act, would be enacted into law before the November US midterm elections. The measure 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 United States and the Philippines, according to Trade and Industry Secretary Cristino Panlilio, concurrent managing head of the Board of Investments.

“The SAVE Act is a win-win formula that will benefit both the US textile manufacturers and the Philippine apparel industry,” Panlilio said Friday (Saturday in Manila) in a luncheon briefing in Washington D.C. “This is the message we want, to put across in Capitol Hill, and we need the help of our Filipino compatriots in America to help us lobby their lawmakers.”

Panlilio said the proposed measure would grant duty-free treatment to garments wholly assembled in the Philippines, provided that these are made from
US-made fabrics, such as yarn and cotton. In exchange, US yarn and fabrics will also be granted duty-free entry to the Philippines for use by local apparel manufacturers for export to the United States.
Generate 450,000 jobs

Panlilio estimates that the deal would generate 450,000 additional jobs in the country in five years and double or treble Philippine garment exports to America to as much $3 billion from the current $1 billion yearly.

Philippine Ambassador to the US Willy Gaa, who attended the same briefing, said the three-million strong ethnic Filipinos in the US “could make a difference” by actively lobbying and engaging their respective congressmen and senators.

“I urge our Filipino Americans to call or e-mail their legislators to support this crucial measure—in the same way they lobbied strongly for our World War II veterans,” Gaa said.

According to Panlilio, “95 percent” of the legislators they have met so far indicated their support for the SAVE Act, but he added they need to generate a critical mass of American lawmakers to pass the bill.

“We need a fastbreak,” said Panlilio, a member of the 1969 Ateneo Blue Eagles National Collegiate Athletic Assiciation champion team. “We’re in the last two minutes, and this is a never say die game.”

He said they are optimistic about getting the support of congressional leaders—Senate Majority Leader Harry Reid and Senator Daniel Inouye and House Speaker Nancy Pelosi—to shepherd the bill’s passage.

Capitol Hill observers, however, doubt if there is enough time during the so-called lame-duck sessions to muster enough support to pass the bill at a time when most legislators are fighting for their own survival in the November US polls.

One major thing going for the Philippine lobby is the fact that the US textile industry is strongly supporting the SAVE Act.

The reason, of course, is that passage of the bill will dramatically increase US textile exports from $13.5 million in 2009 to $500 million in five years.

In return, Philippine garment exports which have declined from $2.1 billion in 2006 to just $1 billion in 2009 will also rebound to previous high levels. The US market accounts for 80 percent of Philippine garment exports.

Much of the decline in RP-made apparel exports to the US was caused by cheap and subsidized exports from China plus the 17 to 33 percent tariff levied on these exports, from zero level before. –JUN MEDINA SPECIAL CORRESPONDENT, Manila Times