Aquino should personally lobby for SAVE Act

THE Save Our Industries Act, a bill in the US Congress that would enable the freer entry of Philippine-made garments into the highly lucrative US market, would be re-filed in the current 112th Congress after it was snubbed in the last legislative session.

Cristina DC Pastor of FilAm magazine wrote about this welcome piece of news last week in a story that was also published locally in the BusinessMirror.

The story said Cristino Panlilio, vice chairman of the Board of Investments, was in New York to drum up publicity for the bill. He called on all Filipino-Americans (around 5 million in number) to phone their senators and congressmen and urge them to support the bill.

He said some big names in the in the US fashion-and-garment industries are already rallying behind the bill, among them, Ann Taylor, Liz Clairborne, Ralph Lauren and Natori, which is owned by Fil-Am Josie Natori. He added that boxing legend Manny Pacquiao has agreed to do a promotional roadshow.

With such a strong show of support for the bill, can we not expect President Aquino himself to personally lobby American lawmakers to pass the Save Our Industries Act?

Mr. Aquino’s popularity and fresh mandate puts him in a superb position to influence key U.S. legislators to approve the bill. He needs to move fast so that the bill would have a chance this time around. It did not even get past the committee level in the last US Congress session.

According to the FilAm story, there are many hurdles to the bill, including the China special-interest group.
China controls 42 percent of the apparel market in the US. The Philippines’ share is only 1 percent.

The bill, also called the SAVE Act, is meant to ‘save’ or rescue the moribund U.S. textile industry, but it would also benefit the Philippines’ labor-intensive garments industry in a big way because it would allow Philippine-made garments using American fabrics greater access to the U.S. market for men’s, women’s and children’s apparel, worth some $200 billion annually.

Ready-to-wear (RTW) clothes made in the Philippines using American textiles would enjoy definite advantages such as duty-free privileges, thus making them even more price-competitive when they reach US stores.

This will surely encourage more apparel makers from the US to build new factories here, bring in American textiles, harness skilled Filipino workers to design, cut and sew the garments, and then re-export the RTW clothes back to the US.

They will be driven to do this because once their Philippine-made garments are shipped to America they will enjoy higher margins not just because of the low cost of production here, but also owing to the reduced if not zero U.S. tariffs.

The SAVE Act’s backers are predicting 10 to 12 percent lower productions costs in the Philippines than in China.

According to The Fil-Am, a draft of the bill shows which types of textiles would be subject to duty-free treatment. They include fabrics dyed and finished in the US that can be embroidered, stone-washed and screen-printed in the Philippines; women’s skirts and girls’ cotton coats; infants’ wear; and cotton and man-made fiber dresses and skirts.

The bill is obviously mutually beneficial to the Philippines and the U.S. It will spur thousands of new jobs, both in our labor-intensive garments industry and in America’s textile sector.

Garments are already our second-largest export to the U.S., after semiconductors. The local garments industry, now employing some 150,000 Filipinos, could easily add 100,000 new jobs once the US bill is enacted. In its heyday it provided jobs to 600,000 Filipinos and accounted for export receipts of about $3 billion.

Local contract manufacturers for American apparel makers would also benefit. The Philippines already has a solid reputation when it comes to the manufacture of garments meant for American stores, particularly the high-end ones. Some of these brands, as the Fil-Am’s story mentioned, have already expressed support for the bill.

The American firms likely to be drawn to the Philippines include Polo Ralph Lauren Corp., Levi-Strauss & Co., Guess? Inc., Urban Outfitters Inc., Aeropostale Inc., American Eagle Outfitters Inc., Pacific Sunwear of California Inc., Hot Topic Inc., Abercrombie & Fitch Co., True Religion Apparel Inc., The Gap Inc.; Limited Brands Inc.; Buckle Inc.; The Wet Seal Inc., Zumiez Inc., J. C. Penney Co. Inc., Sears Holdings Corp., AnnTaylor Stores Corp., Cache Inc., The Cato Corp., Charming Shoppes Inc., Chico’s FAS Inc., Christopher and Banks Corp., J. Crew Group Inc., Bebe Stores Inc., The Talbots Inc., New York & Co. Inc., and Coldwater Creek Inc.

Many of the American firms are specialty apparel retailers or department stores that produce their own lines of clothing for men, women and children, and some of them already have existing Philippine facilities.

So how about it Mr. President? Can the garments industry count on your personal endorsement of the SAVE Act to American legislators and even President Obama?

[Editor’s note: The Manila Times has published several editorials and other articles discussing the importance both to the Philippines and to the USA of the Save Act.] –ERNESTO F. HERRERA, Manila Times

ernestboyherrera@yahoo.com