RP seeks continued GSP privilege in US

MANILA, Philippines - The Philippines is lobbying for the retention of trade benefits under the US Generalized System of Preferences (GSP) through entitlement to competitive need limit (CNL) for seven export products.

“The granting of retention of US GSP privilege to these products would give the country’s exporters the continued opportunity to better compete with other developing country suppliers to the US,” Trade and Industry Secretary Jesli A. Lapus said yesterday.

The US GSP program grants preferential zero tariff for eligible products from a certified list of beneficiary developing countries (BDCs).  

The Philippines, through the Department of Trade and Industry (DTI) will submit comments to the US Trade Representative’s (USTR) Office to justify a request for the extension of the CNL waivers extension for affected Philippine products. An estimated trade opportunity loss from possible revocation was placed by USTR at $5.78 million in 2009.

The seven Philippine product-candidates for possible CNL de minimis waivers include: exposure meters; twine cordage, rope and cables of abaca; nickel-iron storage batteries for vehicles; prepared/preserved citrus fruits; woven rattan mats; articles made of palm leaf that can be carried in the pocket or handbag; and coffee extracts/concentrates/essences preparations. 

The sole Philippine product-candidate for redesignation, on the other hand, is refined cane sugar where no registered imports from all sources, including the Philippines were recorded by USTR.

DTI’s submission to the USTR office highlights the imminent loss in Philippine exporters’ competitiveness and the likely adverse impact on labor and investments from economic displacements in affected sectors, not to mention adjustments the exporters are still undergoing to tide over the recent global downturn.

“Bottomline work of the DTI in requesting preferential treatment is to preserve export gains of small firms and save the jobs their workers,” Lapus said.

There are currently 131 beneficiary countries currently eligible to export approximately 5,000 types of products duty-free to the US. The USTR conducts an annual review of the countries covered and products that are eligible for duty-free treatment under the GSP program.

The statute includes commercial thresholds and waiver provisions regarding imports of products. Apart from the non-eligibility of certain categories of products, the so-called competitive need limit or CNL is the principal restriction that sets a ceiling on GSP benefits for each product and country, triggered by the trade data that the GSP Subcommittee reviews on an annual basis. A country loses its GSP eligibility for a given product the year after the CNL is exceeded.

A CNL de minimis waiver is a one-year exception available to products that the US imports in relatively small quantities. 

Each year, a de minimis waiver will automatically be considered for all BDCs that exceeded the CNL for a product, but only when US imports from all countries were below a certain de minimis dollar limit for the period under review, which is $19.5 million for 2009 from all sources.

The application of the CNL for any product that is imported at a de minimis level can be waived by the GSP sub-committee chaired by the USTR.