Starting July 1, 2017, Philippine-made travel goods such as bags and wallets can enter the U.S. market with zero tariff after the Office of the United States Trade Representative approved the Philippine government’s petition to expand the U.S. Generalized System of Preferences (U.S. GSP) program.
U.S. Ambassador to the Philippines Sung Kim on his Twitter account confirmed that “travel goods are now included under GSP.”
Trade and Industry Secretary Ramon Lopez said the inclusion means “these products will enter US market duty-free” from the previous range of 6% to 20% tariff duty.
Lopez said 23 new tariff lines—which include travel goods such as apparels, bags, wallets, backpacks, luggage, and sport and travel bags—were added with the expansion of the GSP program.
Before the expansion, tariff rates of luggage entering the U.S. market ranged from 6% to 8%; handbags, 9% to 18%; pocket goods, 6% to 18%; and backpack, sports and travel bags, up to almost 20%.
“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,” Lopez pointed out.
In the first five years of the program expansion, Philippine exports to the U.S. are expected to increase by US$100 million annually.
“We look forward to this positive development as a much needed push for expanding employment opportunities and improving countryside development,” Lopez said.
“This will also help contribute to the Duterte administration’s thrust of pursuing inclusive and sustainable growth through job generation and entrepreneurship,” he added.
Filipino small and medium enterprises that make handbags made of recycled materials, leather, water lilies, and other local materials can now become more competitive in the U.S. market with the zero tariff under the expanded GSP program.
The Philippines filed the petition in October 2015 under Section 204 of the Trade Preferences Extension Act of 2015.
The U.S. GSP program aims to promote economic growth in developing countries through preferential and duty-free entry to the U.S. market of products coming from over a hundred beneficiary countries and territories.
Aside from the Philippines, 121 other designated beneficiary countries of the U.S. GSP were granted these benefits.
Data from the Philippine Statistics Authority showed that U.S. is the country’s second largest export market in 2016, with revenues amounting to $8.6 billion.
Trade Undersecretary Ceferino Rodolfo earlier said that about 70% of Philippine exports to the U.S. enter the market duty-free under the GSP Program. – Roumina Pablo
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