The Philippines seeks to renew its participation in the US Generalized System of Preferences as the Board of Investments sets a virtual meeting with its American counterparts.
Trade experts from the BOI are set to meet with the US Trade Representative soon to discuss the merits of a petition for renewal of the Philippine’ participation in the trade scheme.
Under the GSP, the Philippines, as one of the beneficiary countries, enjoys lower duties on many of its products entering the US market.
“In their calendar, it is not likely that the US will renew petitions for renewal of GSP contracts this year. We certainly believe that next year will be a good year for renewals,” said Trade Undersecretary and BOI managing head Ceferino Rodolfo.
The US GSP expired on Dec. 31, 2020, but the Philippines expressed optimism that its petition would be heard and approved by 2022.
Rodolfo said that bilateral relations between the Philippines and the US improved over the years.
“We will emphasize the importance of the GSP to the Philippines. What we are after is industrial cooperation, being able to attract US investments into the Philippines for supply chain that is also critical for the US,” Ceferino said.
The Philippines was among the top five users of the US GSP in 2020, along with Thailand, Indonesia, Brazil and Cambodia.
GSP, the largest and oldest US trade preference program, is designed to promote economic development by allowing duty-free entry into the United States for 3,500 products from the 119 designated beneficiary countries and territories.
To remain eligible for these advantages, beneficiary countries should comply with 15 statutory eligibility criteria, including taking steps to afford internationally-recognized worker rights, providing adequate and effective protection of intellectual property rights and assuring equitable and reasonable access to its markets.
Amid the COVID-19 pandemic, the USTR held public hearings through written submissions and responses to questions from the Trade Policy Staff Committee on May 27 to Aug. 5, 2020 for the 2020 Annual GSP Product Review.
US imports claimed under the US GSP program amounted to $16.8 billion in 2020, down 20.1 percent from 2019’s $21 billion and 30 percent from 2018’s $24 billion. The decline in GSP import likely reflected in part the overall drop in US imports during the pandemic and the removal of India and Turkey from the program in 2019 and the lifting of benefits for some Thai products.
US goods imports from Philippines hit $12.8 billion in 2019, led by electrical machinery at $4.6 billion, machinery at $3.4 billion, optical and medical instruments at $561 million, knit apparel at $480 million and leather products at $469 million.