The Philippines is gaining support from more US lawmakers for the “Save Our Industries Act” bill, which may be repackaged with duty-free treatment of American fabrics and yarns entering Manila as materials for Philippine-made apparel exports to the US.
Trade and Industry officials have been leading efforts to drum up the bill seeking to revive the Philippine garments industry (which, in the early 2000s, was too focused on simple assembly to survive trade liberalization) and the US textile industry. This, by allowing the duty-free entry of Philippine-made apparel into the United States, provided Manila’s exports were made of American textiles.
“Right now, we have about 30 congressmen and 10 senators to co-sponsor the bill,” Trade Undersecretary Cristino L. Panlilio said in an interview. “Even if people say it’s a lameduck Congress, considering the coming elections, we’re working hard to have it included in the plenary session.”
US lawmakers are in a campaign mode ahead of the November 10 elections but they may still deliberate on pending measures until the next Congress opens in January 2012. Panlilio said Philippine representatives were working on getting support from as wide a range of lawmakers as possible.
Other Philippine agencies, including the Department of Foreign Affairs (DFA), are also part of the effort.
Foreign Affairs Secretary Albert del Rosario earlier said that the proposed measure would benefit both sides in terms of job generation and higher export sales.
However, the US wants concessions to ease the estimated $200 million to $220 million losses its local industry may incur. The DTI, however, still needs to consult with the Department of Finance on the matter.
The Philippines is being asked to allow duty-free imports of all US-made raw materials for garments. At present, Philippine exporters are allowed to import 70 percent of their raw materials duty-free.
Philippine officials have taken the “brotherhood” approach to US authorities (reminding them of Philippine-American friendship in war and peace times) and halved the period for duty-free textile and apparel trading with the US to five years, whittling down the $500 million estimated potential losses on the part of the US. The Philippine government has also assured the US that it will get from other sources only materials that are not produced in the US.
Trade officials are hoping that the Save Act will help revive the local garments industry.
The garments industry was one of the Philippines’ leading exporters for four decades until the 1990s, when it lost its markets to other Asian countries, particularly China, which offered cheaper products. At its peak in 1991, the garments industry represented more than a third of Philippine exports, the second-biggest dollar earner after electronics, and employed about one million.