The Philippines is planning to ask the United States for a two-year extension to the compensation package put in place to protect its garment industry when the US imposed its own rules of origin (ROO) in 1996.

Trade and Industry Secretary Manuel A Roxas II is meeting with US Trade Representative Robert Zoellick in Manila next week. "We will appeal that the concession the US gave us for the last three years be given for the remainder of the quota years (or until 2004)," he said.

The concession was initially granted in 1997 when the US introduced a rules of origin policy that credited garment export quotas to the country where the fabric or raw material came from and not to the country where the finished product was made. Amid criticism that this undermined the World Trade Organisation's attempts to harmonise rules of origin and would damage the Philippine industry which is mostly involved in cut and sew, in 1997 the US granted additional garment quotas to the Philippines worth $50 million.

This concession provides additional yearly quota in the form of flexibilities that enable the Philippines to transfer quota from under- to over-performing categories.

An earlier extension was granted in 1999.