The Department of Trade and Industry is hoping to secure before June this year a favorable decision from the United States Trade Representative Office on the country’s petition to include travel goods on the list of products covered by the US generalized system of preferences.
The inclusion in the US GSP of travel goods, it said, would result in an increase in the country’s export receipts by about $100 million yearly.
“We’re there. The USTR has already issued a notice that it had accepted our petition and that public hearings were ongoing,” Trade Undersecretary Ceferino S. Rodolfo said.
According to the petition, the inclusion of travel goods—specifically luggage, handbags, pocket goods, backpacks, sports and travel bags—in the US GSP list will “further the economic growth of the Philippines by boosting exports, creating jobs and growing GDP.”
“Should the United States government approve the petition, the Philippines estimates that exports will increase by about $100 million yearly in the first five years after duty-free access is granted. Based on this estimate, the increase in exports would generate 70,000 new direct jobs, which would lead to an increase in GDP of nearly 0.5 percent,” the petition stated.
Currently, Philippine exports of these products to the United States are slapped tariffs of between 4.7 and 20 percent. Despite these tariffs, the US has consistently been the largest export market for the Philippines for total travel goods, accounting for 54 percent in 2014.
Of these products, backpacks, sports and travel bag were the top sellers, with more than 5 million pieces exported to the US in 2014. This category included man-made fiber and leather sports and travel bags as well as man-made fiber backpacks.
Exports of handbags were also important for the Philippines. In 2014, the country shipped million pieces of handbags to the US in 2014.
In the meantime, the USTR has also accepted and is now evaluating the Philippines’ petition for a waiver on the limitations set for the export of hydration backpacks under the US GSP.
The granting of waiver was necessary so that hydration backpacks would not be removed from the GSP list. Latest data showed that shipments of this product from the Philippines were already “currently above the allotted 50 percent share of the global imports.”
In his letter to the USTR, Rodolfo explained that the small breach in the import limits was due mainly to production delays at the end of 2014, which resulted in larger than normal shipping to the US at the end of 2015.