The Philippines will push for industrial cooperation with the US in the proposed bilateral free trade deal.

Trade and Industry Undersecretary Ceferino S. Rodolfo said he is going to hold a meeting with his counterpart at the US Trade Representative (USTR) where he would raise the country’s engagement with its ally.

Rodolfo noted of the timing of raising this strategic bilateral deal citing the improving relations with the US. It could be recalled that the Duterte administration had rough relations with the US in several aspects.

According to Rodolfo, the Philippines will be pushing for industrial cooperation under the proposed bilateral FTA with the US to be able to attract American investments into the country to support and fully develop the supply chain, which is critical for both countries.

Meantime, Rodolfo is optimistic that the US will renew its Generalized System of Preferences, a trade scheme that grants zero duty and preferential treatment on a wide array of exports of its developing trade partners.

The renewal, however, is not likely to happen this year anymore, but by 2022 yet. Rodolfo said he will also raise the importance of GSP to the Philippines.

The US GSP expired last Dec. 31, 2020. This means Philippine exports that are eligible for duty-free or preferential tariff under the US-GSP scheme have to pay the most-favored nation (MFN) rates.

The US Customs and Border Protection (CBP), however, has a program in place that, in the event that the GSP is renewed with a retroactive refund clause, CBP will automate the duty refund process.

Hence, Philippine exporters of US GSP eligible products are advised to coordinate with their US importers to classify those GSP imports under the Special Tariff Program Indicator (SPI) “A” to ensure that they are considered as GSP imports and will be subject to duty refunds once the program is re-authorized by the US Congress. The US Congress last renewed the GSP in March of 2018 with expiration date set for December 31, 2020.

“Never was it never renewed,” said Sergio Ortiz-Luis Jr., president of the Philippine Exporters Confederation Inc. stressing there is no need for exporters to worry about their refund.

Philippine GSP exports to the US in 2019 totaled $1.6 billion. Top exports under these trade privileges include coconut oil, pineapples, crab meat,, although an estimated $654 million worth of exports that could have been duty-free did not avail of the privilege.

In 2017, GSP exports accounts for 17.6 percent of Philippine exports to the US, valued at $ 1.492 billion. Leading GSP exports include tires, sugar, electronics, and fruit and vegetable juices.

The US GSP also extended the duty-free treatment to travel goods such as suitcases; vanity and attaché cases; handbags; backpacks; travel, sports and similar bags and cases.

The US-GSP provides nonreciprocal, duty-free tariff treatment to certain products imported into the US from designated beneficiary developing countries (BDCs). Currently, 119 developing countries and territories are GSP beneficiary developing countries. The GSP program provides duty-free entry into the US for over 3,500 products (based on 8-digit U.S. Harmonized Tariff Schedule tariff lines) from BDCs, and duty-free status to an additional 1,500 products from 44 GSP beneficiaries additionally designated as “least developed beneficiary developing countries” (LDBDCs). In 2019, products valued at about $21.0 billion (imports for consumption) entered the United States duty-free under the program, out of $235.1 billion worth of total imports from GSP countries. Total US imports from all countries (including GSP) amounted to about $2.5 trillion in 2019.

Source: Manila Bulletin (