Travel goods get tax-free entry to US

The Office of the United States Trade Representative (USTR) has approved the inclusion of Philippine travel goods in the new and expanded US General System of Preferences (GSP) scheme, making way for the duty-free entry of these products to the US market in a development that would “boost the local manufacturing industry,” a top official said.

Trade and Industry Secretary Ramon M. Lopez said yesterday that the new GSP program, which added 23 tariff lines of travel goods, was effective from July 1 onwards, noting that this would help increase the country’s gross domestic product (GDP).

According to Lopez, these Philippine-made travel goods —which include apparel, bags, wallets and backpacks—would now enjoy zero duty after being previously charged 6 to 20 percent of tariff.

“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,” he said in a statement.

The US GSP, considered the biggest and oldest US trade preference program, aims to promote economic growth in developing countries through preferential and duty-free entry to the US market of products from more than a hundred beneficiary countries and territories, including the Philippines.

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, DTI said in a statement.

Citing the US International Trade Center (ITC), DTI said that 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-biggest import source of travel goods in the US.

Maritess Agoncillo, executive director of the Confederation of Garments Exporters of the Philippines (Congep), said the decision was the fruit of joint efforts from both the public and private sectors in strengthening the Philippine position in pushing for GSP coverage of travel goods.

The US—a traditional ally of the Philippines—was the country’s third-largest trading partner, second biggest export market and third top import supplier, DTI said.

The expansion of the GSP scheme came under the Trump administration, which otherwise aired a protectionist rhetoric. According to USTR’s statement on its website, the inclusion of travel goods would help US travel goods brands and retailers to “broaden their sourcing opportunities for these products.”