RP ASKS U.S. FOR MORE DUTY-FREE ACCESS

Manila, May 14, 2003 -- President Arroyo will call for the inclusion and 
reinstatement of Philippines products such as dried mangoes, pineapple 
juice, carrageenan, and tuna in the next cycle of the US Generalized System 
of Preferences (GSP) during her upcoming state visit in the United States 
this week.

Trade and Industry Secretary Mar Roxas said the request for additional GSP 
benefits, if approved, is a concrete delivery of the US' earlier commitment 
to provide the Philippines with over $1 billion in GSP benefits.

The GSP s a scheme whereby the US grants preferential treatment to 
approximately 4,100 products from 139 beneficiary countries in the form of 
duty free access. The GSP was reauthorized by the US Congress retroactive 
to September 30, 2001 up to December 31, 2006.

The Philippines was the 6th major beneficiary country of the scheme in 2001 
with total GSP imports from the country registered at $676 million.

"It has contributed to the Philippine economy by way of attracting foreign 
investors, providing quality employment opportunities and contributing to 
foreign exchange generation," Roxas said.

During the RP-US Trade and Investment Council meeting conducted early this 
month, the Philippines submitted a petition to designate Philippine 
pineapple juice an eligible article in the GSP.

Roxas said that while the Philippines was able to export some $47.4 million 
of the commodity in 2001, inclusion of said product in the GSP will bring 
an additional foreign exchange revenues for the country as well as provide 
more employment to the local workforce.

About 400,000 people are currently engaged in the pineapple business in the 
country from farming to manufacturing. Dole USA which has offshore 
operations in the country through Dole Philippines leads in this kind of 
business.

At present, pineapple juice is a GSP eligible product for which only 
African and other least developed countries enjoy GSP duty free privilege.

The Philippines is likewise reiterating its request for the grant of de 
minimis waivers for the following products for consideration in the 2003 
GSP Annual Review: brined/salted fish; dried guavas, mangoes and 
mangosteenes; prepared/preserved papaya pulp; handbags of abaca; twine, 
cordage and rope; and sports gloves.

"The Philippines also requests for the restoration of GSP benefits for 
articles of paper mache, which is also likely to stay below the $105 
million CNL (competitive need limit) for the entire year of 2002. US 
imports of this product for the same 10-month period amounted to only $2.9 
million," said Roxas.

"Positive consideration of the Philippine request will primarily benefit 
the small and medium enterprises engaged in the production of the said 
products. The grant of duty free access is expected to enhance their 
competitiveness in the US market that would translate to increased income 
and employment," he said.

Roxas said the petition for the inclusion of tuna in foil pouches and tuna 
in cans will also be put forward by the Philippines.

"The tuna industry, through the Tuna Canners Association of the 
Philippines, is looking at the US GSP as a means to cushion the perceived 
adverse impact of the grant of duty free treatment to Andean tuna in 
pouches and to gain increased market access for the tuna exports to the 
US." he said.

The Philippines is likewise seeking assurance that the US will favorably 
consider the GSP application of carrageenan. "While the Philippine 
seaweed/carrageenan industry sees the GSP as a vehicle to further enhance 
its market foothold in the US market, the US will equally benefit in the 
process given the presence of American companies engaged in the carrageenan 
business in the Philippines," Roxas said.

The bulk of 96 percent of the country's production of carrageenan is 
exported with Europe and the US as the major markets, accounting for more 
than 80 percent of the country's total exports over the 1999-2001 period. 
In 2001, carrageenan exports to the US reached $24.1 billion or 26 percent 
share.

The Philippines is also requesting for the reinstatement of GSP eligibility 
of insulated food or beverage bag with outer surface of textile materials. 
"The restoration of the GSP duty free benefit is deemed important since 7 
percent MFN (most-favored nation) duty levied on insulated food or beverage 
bag impacts on the price competitiveness of the said product coming from 
the Philippines," he said.

Dong In Entech K-1 Inc., a Philippine supplier of insulated food or 
beverage bag (hydration system) to US company Camelbak Products, Inc.., 
requested for the reinstatement of the product after the US delisted 
hydration carrier from the roster of GSP eligible products in June 2002.

The US Customs Service and the Office of Textiles and Apparel (OTA) of the 
Department of Commerce recommended the delisting as they said Camelback's 
hydration systems are subject to the Agreement on Textile and Clothing 
adopted in 1994 as part of the Uruguay Round of Table Negotiations. The US 
GSP classifies textile and apparel articles as import sensitive that may 
not be designated as eligible articles.

The Philippines however views that insulated food or beverages bas as a 
textile article may not be that sensitive in the US since Camelbak is the 
only company manufacturing the said product. Moreover, the Philippines 
import the textile material from Duport Cordura Nylon in the US.

Reported by: Sol Jose Vanzi

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