Trade Secretary Ramon Lopez welcomed the approval of the Office of the United States Trade Representative to include Philippine travel goods, such as bags and backpacks, in the new and expanded general system of preferences scheme.
Effective July 1, 2017, all US GSP beneficiary developing countries will enjoy duty-free treatment for a number of their travel good exports to the US.
The new GSP program expanded the coverage to include 23 tariff lines, allowing travel goods such as apparels, bags, wallets and backpacks, luggage, and sport and travel bags made in the Philippines to enter the US market duty-free.
“This expansion will boost the local manufacturing industry and eventually provide more employment opportunities for Filipinos, creating 70,000 new jobs and increasing our GDP to 0.5 percent,” Lopez said.
A number of American companies are currently manufacturing travel goods in the Philippines, including Coach, Tory Burch and Michael Kors.
According to the US International Trade Center, the US imported an estimated $232 million from the 23 tariff lines of travel goods from the Philippines in 2016, making the country the fifth largest source of travel goods in the US.
With the new GSP scheme, the duty-free treatment could increase Philippine travel goods exports to the United States by $100 million annually for the first five years.
“The inclusion of travel goods into GSP will certainly provide benefits to our exporters, particularly micro, small, and medium enterprises and export-oriented agri-businesses utilizing banana and other vegetable fibers and community based industries in the various regions of the country,” said Trade Undersecretary Ceferino Rodolfo.
The Trade Department promised to sustain and strengthen its advocacy campaign through the Doing Business in Free Trade Area Program to encourage Philippine exporters use this access and generate jobs.
The Confederation of Garments Exporters of the Philippines, meanwhile, said the decision of the US government was an outcome of the joint efforts of the Philippines government and the private sector to strengthen the position on pushing for GSP for travel goods.
Lopez added that he “looks forward to this positive development as a much needed push for expanding employment opportunities and improving countryside development.” “This will also help contribute to the Duterte administration’s thrust of pursuing inclusive and sustainable growth thru job generation and entrepreneurship,” he said.