PHILIPPINES: Running out of time on US garment bill?
The Philippine government could be running out of time to lobby for a proposed bill giving Philippine-made apparel duty-free access to the United States, since US business is now on hold as Congress recesses for the November mid-term elections.
Even as US lawmakers headed home to hit the campaign trail, the Aquino Administration still expressed hope that the Save Our Industries Act or SAVE Act would be enacted into law.
At a press briefing in Malacanang on Thursday (30 September), Trade Secretary Gregory Domingo said the united efforts of Filipino-Americans could contribute to the passage of the bill. Earlier this week Undersecretary Cristino Panilio headed to Washington DC to meet American senators and congressmen to try to push for the measure.
The SAVE Act, introduced last October, would grant duty-free treatment to garments wholly assembled in the Philippines, provided that these are made from US-made fabrics, such as yarn and cotton. US yarns and fabrics will also be granted duty-free entry to the Philippines, as they are sold to the apparel manufacturers in the country.
Domingo said the proposed measure is a "win-win formula" since it stands to boost the US textiles and Philippine garment industries and will create some 200,000 jobs in the Philippines. Advocates also claim US textile exports to the Philippines are expected to grow from US$13.5m in 2009 to US$500m in five years.
However, critics say the bill fails to deliver for the US textile industry because it contains special exceptions allowing duty-free access for non-US fabric. For example, linings, narrow elastic fabrics, sewing thread, and pocketing, could come from any source; and a de minimis provision allows for up to 10% of the fibre or yarn (except for elastomeric yarn) in the fabric to be foreign.
An even more controversial provision is that of 'single transformation,' which allows for duty-free treatment of certain apparel - including brassieres, women's wool apparel and men's wool coats - assembled in the Philippines without regard to the origin of the fabric or yarn.
A US trade expert consulted today (1 October) by just-style said Congress may yet consider substantive legislation in the lame duck session following the mid-term elections, "but I would not bet on it taking up the SAVE bill."
She added: "There are far higher priorities, including legislation that is much farther along in the process."
On the trade front, it seems the greatest speculation with respect to the lame duck session is firstly, whether the Senate will take up the China currency bill so overwhelmingly approved by the House earlier this week. And secondly, whether the two houses will approve short term extensions of the expiring preference programs (like the Generalized System of Preferences) - "and even these are far from clear."
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