Tory Burch, Michael Kors want PH-made travel bags duty-free

TOP AMERICAN fashion brands Tory Burch and Michael Kors and other luxury brands in the United States have backed the bid of beneficiary countries such as the Philippines to include travel goods in the economic giant’s generalized system of preferences (US GSP).

Allowing travel goods—specifically luggage, handbags, backpacks, and sports bags—to be eligible for zero duties under the US GSP will readily hike Philippine exports to the US by $100 million annually, generate some 70,000 new direct jobs, and grow the local economy by nearly 0.5 percent.

Based on comments submitted by Tory Burch, through its law firm Sharretts, Paley, Carter & Blauvelt, P.C., granting GSP eligibility “to the travel goods industry from all beneficiary countries would provide the incentive for expansion and would eventually attract investment needed to develop the appropriate workforce. Companies such as Tory Burch would then be able to consider more countries for production.”

“Many of the companies Tory Burch currently sources from in India and the Philippines are owned by Chinese companies looking for less expensive sourcing options. While they already have production facilities in these countries, several of the factories indicated they intended to expand capacity in the event that GSP was granted to the travel goods sector,” the report stated.

Tory Burch even disclosed it was planning to shift an unspecified capacity of its production to the Philippines in the next several years.

Michael Kors Holdings, meanwhile, noted it has a strong interest in obtaining GSP eligibility for textile, leather, and plastic luggage, handbags, small leather goods, and travel bags, since it would enable the company to continue to offer consumers quality products at reasonable prices.

“Michael Kors urges the US Trade Representative to grant GSP eligibility to the requested luggage, handbag, small leather goods and travel bags produced in the Philippines. The Philippine manufacturing industry needed the duty-free designation in order to strengthen and grow and there was no threat of market disruption in the United States, since the domestic industry was virtually non-existent, having long since experienced globalization,” the petition stated.

Michael Kors currently has five suppliers in the Philippines, namely Superl Philippines Inc., Siglo Leatherware Manufacturing, FPF Corp., D’Luxe Bags Philippines Inc. and Desktop Bags Philippines Inc.

Victorinox Swiss Army Inc. (VSA), a well-known designer and maker of cutlery, watches, apparel, fragrances and travel goods, has also expressed the same. Victorinox is based in Switzerland, but it has significant presence and operations in New York, Connecticut and Missouri.

“While VSA does not own supplier factories located in GSP eligible countries, the company is a large buyer of the travel goods described in this petition and produced in GSP eligible countries. As such, VSA is impacted directly by the operation of the GSP and has significant economic interest in this proceeding,” it said.

Meanwhile, the Handbag Coalition of Companies and Organizations, which includes as members brands and retailers that design, import and sell products in the travel goods category, also expressed support to the granting of the petition sought by the Philippines and other beneficiary countries.

“In the short term, current travel goods producers like the Philippines, Indonesia, Cambodia, Thailand and India would likely see the most benefit. With GSP duty-free benefits, beneficiary developing countries would be able to compete for a significant share of China’s current 89 percent market dominance. GSP duty-free benefits should allow petitioners to diversify and stabilize their sourcing decisions and dampen the high level of volatility in imports of the subject products from the Philippines, Cambodia and Indonesia,” the filing stated.