A number of local exporters will continue to enjoy duty-free access to the United States market after US President Barack Obama signed the renewal of the Generalized System of Preference (GSP).
Trade Undersecretary Adrian Cristobal Jr. said that the new GSP would allow retroactive claim for preferential duty-free access starting January 1.
“Our exporters will be refunded for the difference in tariffs paid after the GSP expired last December 2010. US Customs is now preparing guidelines for the refund process,” Cristobal said in a statement Monday.
President Obama signed the GSP renewal last October 21. The US GSP allows certain goods from around 130 developing economies to enter the United States duty-free.
The country’s GSP utilization rate ranged from 10 to 12 percent over the last five years. In 2009, the GSP utilization rate stood at around 11 percent of exports, equivalent to some $734 million worth of GSP-eligible products.
Without GSP privileges, local exporters of insulated ignition wiring harness, air-conditioning machine parts, insulated electrical conductors, wooden tableware and kitchenware, silver articles of jewelry, certain types of women’s and girls’ dresses, raw cane sugar, bananas, dried mangoes, guavas and mangosteen would have to pay corresponding tariffs when they ship their goods to the United States.
Apart from the Philippines, some of the countries covered by the GSP are Brazil, Egypt, South Africa, Thailand and Turkey.
The renewed GSP takes effect on November 5 and will remain in effect until July 31, 2013.
According to the Department of Trade and Industry’s Bureau of International Trade Relations, the Philippines ranked seventh among the United States’ top GSP beneficiary-countries, accounting for 4.9 percent of total GSP imports.
In 2010 alone, the country’s GSP utilization was 72 percent.
“The US is an important ally of the Philippines and we welcome the move of the US Congress to renew the GSP privileges. Renewal of the GSP secures close to $1 billion in export revenues,” Trade Secretary Gregory Domingo said.
The United States last year was the Philippines’ second-largest export market behind Japan. Total trade between the Philippines and the US reached $13.86 billion in 2010.
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By: Abigail L. Ho
Source: Philippine Daily Inquirer, October 25, 2011
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