Business as usual even sans GSP – exporters

MANILA, Philippines –  Local exporters announced it is business as usual for them despite the expiration of the privileges enjoyed by the country under the US Generalized System of Preference (GSP).

The US GSP is an instrument of the United States’ foreign policy and economic cooperation that permits certain goods from about 130 developing countries to enter the US duty-free. The said tariff privileges expired last Dec. 31, 2010, but designated beneficiary developing countries are hopeful the GSP privilege status will be restored through legislation.

The Department of Trade and Industry (DTI) has been spearheading Philippine efforts to renegotiate the granting of tariff privileges for a wide range of local goods under the US GSP.

The DTI said Philippine exporters can continue applying for GSP privileges since in the past, the US government reimburses whatever duties were paid after the GSP is restored.

Countries that will be affected by the removal of the GSP include Brazil, South Africa, Thailand, Egypt, Turkey, and the Philippines to name a few. Examples of imports to be affected by the GSP status are auto parts, wood and stone construction materials, and ferro alloys from Brazil; certain passenger ties from Thailand; and certain agricultural imports from Turkey.

The US has considered the Philippines an important trading ally in Asia and the government is optimistic that with the renewed business confidence in the Philippine leadership and business environment, the GSP status will be renewed.

The DTI also said that it had meetings with officials from the US government on this issue. DTI said this is not the first time that the GSP has expired without an enabling law to renew it. Several times in the past, a law renewing the privilege was passed months after expiration but took retroactive effect.

The Philippines’ US GSP utilization hovers around 10-12 percent over the last five years. The utilization rate of about 11 percent registered in 2009 was roughly equivalent to $734 million of GSP-eligible products.

Outside the United States, the lobby to have the US GSP reauthorized comes from over a hundred developing countries that have at some time or another enjoyed the GSP-supported market access.

In the Philippines, examples of products that used to enjoy the GSP privilege include insulated ignition wiring harness, raw cane sugar, insulated electrical conductors, dried mangoes, guavas, mangosteen, and certain articles carried in handbags to cite a few. –Ma. Elisa P. Osorio (The Philippine Star)