US gives PH-made luxury handbags a second look

The United States Trade Representative Office (USTR) will reconsider the Philippines’ appeal to add luggage and other travel goods to its list of eligible products with zero duty.

Trade Secretary Ramon Lopez said on Thursday the USTR has set in October this year a fresh round of hearings to look into the possible inclusion of Philippine-made travel goods under the economic giant’s generalized system of preferences (GSP). The travel goods include luggage, handbags, pocket goods as well as backpacks, sports and travel bags.

An inclusion does not only mean that these goods can be exported to the US at zero duty. If granted, this move could readily hike Philippine exports by as much as $700 million and generate some 70,000 additional jobs for related industries including garments, thus bolstering the local economy by nearly 0.5 percent during the duration of the GSP program.

It could also attract more American manufacturers to expand or set up their production facilities in the Philippines.

“I was able to meet with (Deputy Trade Representative Robert W.) Holleyman II during the recent Asean summit where we expressed appreciation to the USTR for considering the Philippine request for the review of the re-inclusion of travel goods under the GSP,” Lopez said.

He said the process was now moving, with local officials having formally presented documents to support the cause. He said the industry could only hope now that the request be approved.

“The only concern is that the Philippines, in their view, is no longer a least developed economy. But we said we’re still a developing country and we need all the support,” Lopez said.

The Philippines earlier failed to secure a favorable decision from the USTR, which decided to “defer” the granting of the Philippines’ petition, along with that of Thailand and Indonesia, among other beneficiary countries under the said preferential scheme. It allowed instead the inclusion of travel goods manufactured in least developed beneficiary developing countries and those under the African Growth and Opportunity Act (AGOA).

Earlier, top American fashion brands Tory Burch and Michael Kors and other luxury brands backed the bid of beneficiary countries such as the Philippines to include travel goods in the US’ GSP.

In the event the GSP is granted, Tory Burch said it was  to shift an unspecified capacity of its production to the Philippines in the next several years.

Michael Kors Holdings similarly noted its strong interest in obtaining GSP eligibility for the Philippines, saying it would enable the company to continue to offer consumers quality products at reasonable prices. The company currently has five suppliers in the Philippines: Superl Philippines Inc., Siglo Leatherware Manufacturing, FPF Corp., D’Luxe Bags Philippines Inc., and Desktop Bags Philippines Inc.

Luxury brand Coach and two American industry associations, namely American Apparel and Footwear Association (AAFA) and Outdoor Industry Association (OIA), expressed disappointment that countries like the Philippines were not granted the same preferential treatment.

“In particular, Coach views the Philippines, a GSP beneficiary developing country, as a major sourcing partner with the potential to grow immediately. Philippine-based factories are capable of producing bags that meet Coach’s needs. Coach has continued to develop its sourcing options within the Philippines,” Coach said in an earlier statement.