PH travel goods to enter US mart duty-free starting July 1

Colorful handmade bags at a souvenir shop in the Philippines. (ShutterStock)

MANILA — Starting July 1, Philippine-made travel goods such as bags and wallets, can enter the United States market with zero tariff.

This after the Office of the US Trade Representative (USTR) approved the Philippine government’s petition to expand the US Generalized System of Preferences (US-GSP) program.

US Ambassador to the Philippines Sung Kim, in his Twitter account, said that “travel goods are now included under GSP”.

The US-GSP Program expansion is effective starting Saturday, July 1.

“US Trade Representative (USTR) approved our application for expanding GSP coverage. Meaning these products will enter US market duty-free. From what’s current range of 6 to 20 percent tariff duty, now down to zero,” Department of Trade and Industry (DTI) Secretary Ramon Lopez told reporters in a text message.

Lopez mentioned that there are 23 new tariff lines added in the expansion of GSP Program which include travel goods such as apparels, bags, wallets, backpacks, luggage, and sport and travel bags.

Before the expansion of GSP Program started, tariff rates of luggage entering the US market range from 6.0 to 8.0 percent; handbags, 9.0 to 18 percent; pocket goods, 6.0 to 18 percent; and backpack, sports and travel bags, up to almost 20 percent.

“This expansion will boost the local manufacturing industry and eventually provide more employment opportunities for Filipinos, creating 70,000 new jobs and increasing our GDP to 0.5 percent,” the trade chief noted.

In the first five years of the expansion of the program, Philippine exports to US is expected to increase USD100 million annually.

“We look forward to this positive development as a much needed push for expanding employment opportunities and improving countryside development,” Lopez said.

“This will also help contribute to the Duterte administration’s thrust of pursuing inclusive and sustainable growth thru job generation and entrepreneurship,” he added.

Small and medium enterprises (SMEs), which make handbags made of recycled materials, leather, water lilies, and other local materials can also be competitive in the US market with zero tariffs the expanded GSP Program.

The country filed the petition in October 2015 under Section 204 of the Trade Preferences Extension Act of 2015.

Aside from the Philippines, 121 other designated beneficiary countries of the US-GSP were granted with these benefits.

Data from the Philippine Statistics Authority showed that US is the country’s second largest export market in 2016 with revenues amounting to USD8.6 billion.

In a previous interview, DTI Undersecretary Ceferino Rodolfo said about 70 percent of Philippine exports to US enter the market duty-free under the GSP Program.