RP ASKS U.S. FOR MORE DUTY-FREE ACCESSManila, 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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