RP Eyes Duty-free Trade Deal with US to Boost Textile Industry

Department of Trade and Industry Secretary Jesli Lapus revealed that the Arroyo administration has entered into a duty-free trade agreement with the United States to boost the Philippines' textile industry.

Under the agreement, Philippine-made apparels that use American-made fabric would enter the US duty-free and those made of US yarns at reduced tariffs, Lapus said in a press briefing in Malacañang.

A side component of the proposed agreement also provides for duty-free entry to the US of certain Philippine-made apparel regardless of the source of fabric.

The terms of the agreement were reached during President Gloria Arroyo's visit to the US.

The President's trip to the US and Spain was focused on the common needs of global economies still reeling from the financial crisis to increase trade and generate more jobs. With this, the US and the Philippines have come up with a deal that would increase the textile trade, Lapus said.

He said free trade increases market access and investment opportunities, and a duty-free trade agreement between the Philippines and US will help promote conditions for free competition for the local textile industry.

Lapus said the garment and apparel industry is badly in need of a boost as the sector's employment has gone down drastically to 100,000 jobs from 600, 000.

The official said the drop in the garment industry's employment led the govt to lobby for preferential treatment of Philippine-made textiles in the US Senate under its Save Act or Save our Industries Act of 2010. A similar measure was filed in the US House of Representatives last year.

We are very committed in the full implementation of the Save Act. It will be a win-win solution for the Philippines and the US, Lapus said, adding that the department expects the bill??s passage this year.

The passage of the bill would allow an additional $1.1-billion worth of Philippine garment exports to the US after the first year of implementation, and about $480-million worth of new investments in the Philippines creating more than 200,000 jobs, Lapus said.

He said it would be easier for the country to sell its goods to the US market through the duty-free agreement since Philippine-made apparels have penetrated the high-end consumers and are displayed in prestigious department stores and retail outlets around the world.

He said the buyer profile of the industry has already shifted from importers and mass retailers to brand holders such as GAP, Old Navy, Anne Taylor and Liz Claiborne.

The Philippines has a highly skilled labor force, particularly in embroidery. The Filipino workers are capable of making garments with complicated styles and intricate embroideries and designs, which is at par with the world's best, he added.