The Philippines will continue to enjoy preferential treatment for several Philippine exports to the US after President Donald Trump approved Manila’s request for another round of the US Generalized System of Preferences for the next three years or until 2020.
“We wish to thank the US government for the timely renewal of the GSP program, as Philippine exporters will continue to benefit from enhanced market access to the United States under GSP,” said Trade Secretary Ramon Lopez.
A statement from Washington D.C. stated that the US government confirmed the reauthorization of the US-GSP on March 23, 2018, after Trump signed the Omnibus Spending Bill which included the GSP renewal language.
The renewal authorizes the GSP through Dec. 31, 2020 and includes a mechanism that refunds tariffs paid from Jan. 1, 2018 through the reinstatement date of the program.
The US Trade Representative will also be required to submit an annual report to the relevant congressional trade committees on beneficiaries’ compliance with country-eligibility criteria.
The GSP program covers a total 5,057 products or tariff lines or roughly 47.7 percent of the 10,600 total US tariff lines.
About 3,500 tariff lines are open for all beneficiary developing countries while an additional 1,500 products are given to the least-developed beneficiary developing countries. In July 2017, a total of 23 travel goods articles were added to the program.
Lopez said the Philippines had enjoyed preferential duty-free entry to the US through the GSP program that accounted for 18 percent of Philippine exports to the US, with total value estimated at $1.59 billion.
Top GSP exports to the US include telescopic sights for rifles, spectacle lenses other than glass, new pneumatic radial tires of rubber, non-alcoholic beverages not including fruits and vegetables and electrical machinery and equipment parts.
Lopez said the recent approval of the GSP was a triple-win for developing countries, US companies and American consumers.
Trade Undersecretary Ceferino Rodolfo highlighted the importance of the US GSP in the face of a brewing trade clash among bigger countries.
“The Philippines utilizes all available tools to maintain and even improve its preferential access to key markets. This is important not only in ensuring advantage for our exporters but equally critical, to heighten the Philippines’ advantage as location for manufacturing of these products,” he said.
Trade officials said formal consultations were also underway to exempt Philippine-based exporters from additional tariffs which US might impose on certain products.
“With respect to the US, the longer term goal is to negotiate and conclude a free trade agreement,” Lopez said.
US Trade Representative Ambassador Robert Lighthizer earlier confirmed in a recent testimony to the US congressional ways and means committee that the US was considering a free trade agreement with the Philippines.