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US seeks further cut in duty waiver under SAVE Act
05
Jan '12
The US Government is seeking a further cut in the supposed duty waivers in terms of loss of revenue expected to the US by allowing duty-free export of Philippine made garments to the US under the proposed Save our Industries Act (Save Act).

As informed by the Philippine Trade and Industry Undersecretary Cristino L. Panlilio, originally duties to the extent of US$ 330 million under the Save Act qualified for waiver, but following the US Congress's prodding to ensure passage of the bill this was reduced to US$ 230 million per year, and now the US Senators have indicated that this may be further reduced to US$ 200 million per year.

The Undersecretary informed that some of the US Senators are willing to support the bill if the waiver amount is reduced to US$ 200 million, for which Philippines need to cut another US$ 30 million.

The appropriations committee has also indicated that it would like to see the duty waiver come down to US$ 200 million, he added.

Mr. Panlilio said Philippines is now considering how best it can exercise this cut and two to three more categories may be dropped form the list of duty-free items to make the bill more acceptable to the US Congress.

Philippines previously consented to cut the supposed revenue waivers to US$ 230 million per annum by exercising a cut on the number of garment categories that would qualify for duty-free and preferential duty cuts, from original 17 to nine categories.

The US textile entrepreneurs had demanded exclusion of eight categories of garments, as they said qualifying these categories for preferential tariffs would prove detrimental for their business.

The excluded eight categories included critical fabrics and garments, especially the poplin cloth, which the US firms produce in bulk.

The proposed bill is looked upon as a win-win proposition for both the US and Philippines, as it would revitalize the garment and textile industries of both the countries.

In the past, the Philippine garment and textile industry engaged over 600,000 workers and exported more than US$ 3 billion worth of goods to the US each year.

Currently, however, the Philippine textile and apparel exports to the US have plummeted to slightly above US$ 1 billion, and the number of workers has also dropped.

Fibre2fashion News Desk - India

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