|
MANILA, Philippines — The Philippines has agreed to reduce the number of garment categories to 9 from the original 17 on hopes that the corresponding reduction on the estimated $250 million from $500 million foregone revenues from the American side as a result of the grant of zero-duty on Philippine-made garments would finally persuade the U.S. Congress to finally approve its proposed “Save Our Industries Act.”
This developed as the Philippines also secured the support of US Secretary of State Hillary Clinton during her recent visit in the country for the Save Act, which aims to revive both the Philippines and American garment and textile industries.
"Secretary Clinton is supportive of it. At least we have the support of the executive branch," said Trade and Industry Secretary Gregory L. Domingo.
With Clinton's support, Domingo said, the Philippines has a "reasonable good chance of passing" the proposed bill.
In fact, he said, there are already 24 Senators and Congressmen who have committed to support the bill.
Domingo has met with three US Congressmen – Kevin Brady, Jim McDermott, and Sander Levin at the recently concluded APEC Leaders Summit in Hawaii. The legislators have cited the need to reduce the number of garment categories which access to the U.S. market would be granted zero or preferential tariff from the original 17 categories to 9 to reduce the $500 million estimated foregone revenues to $250 million.
The abolished categories have something to do with the bill's provision that allows sourcing of fabrics and yarn from a third country for assembly in the Philippines and to be exported to the US market at zero duty or preferential tariff rate.
According to Domingo, based on the US Congress computation this would entail an estimated loss of $500 million on the U.S. side should they follow the original 19 categories.
To make the bill more palatable to the U.S. Congress, the Philippines has agreed to reduce the number of categories to 9 from the original 17.
The U.S. textile industry players also moved for the removal of the 8 garment categories as granting preferential rates to these categories may put their operations at a disadvantaged position over low cost producing countries.
These categories include critical cloth and garment categories that the U.S. wants excluded particularly “poplin” cloth, which American firms produce in huge volumes.
Poplin, sometimes called tabinet, is a type of medium to heavy weight durable fabric that is now most frequently made of cotton or a cotton/polyester blend. Common usage of poplin until about the 20th century was to make silk, cotton or heavy weight wool dresses, suitable for winter wear. Poplin was also a popular upholstery fabric. The other category under exclusion is undergarments.
One of the ways to have the bill passed in this Congress is to agree on some critical categories that the US would not want to be opened to foreign competition, an official said.
The passage of the Save Act is expected to revive the Philippines and U.S. garment and textile industries.
Under the bill, the U.S. will supply American yarns and fabrics for assembly in the Philippines and in return would be allowed to export to the US market the finished apparel and garments at zero duty or preferential duty treatment.
The DTI has mounted strong campaign for the passage of the bill. Trade and Industry Undersecretary Cristino L. Panlilio earlier reported the government has secured additional support from 20 congressmen five senators.
Panlilio has also met with the Filipino communities in Chicago, New York, Seattle and Los Angeles to rally their support for the bill's passage.
Once the Save Act is passed, it would allow the exports of Philippine-made garments that used US fabric and yarns to enter into the US market duty free or with preferential duty treatment.
As such, it would also mean creation of more jobs for the industry that has been unable to compete with low-cost garment producing countries such as China, Cambodia and Laos.
Following the abolition of the garment quota, the Philippine garment industry has dwindled employing only 150,000 or almost half of its workforce during its height the while the garment sales to the U.S. have fallen by 50 percent in the last five years.
The Philippines used to export over $3 billion and employ over 600,000 people but these have been reduced to a little over $1 billion in annual exports and a dwindling number of workers.
According to the DTI - Bureau of Export Trade Promotions (BETP), Philippine exports of wearables reached $1.442 billion in 2010. Garments and Textile shares a major stake of 83% in the export of wearables followed by travelgoods and handbags (9%), fine jewelry (4%), headwear (2%), costume jewelry (1%) and jewelry (1%). The US remains to be the top market for garments and textile at 22% followed by Germany (9%), Japan (8%), UK (7%), and France (6%). -- Bernie Cahiles-Magkilat, Manila Bulletin
|
