The Philippines has asked the US government for the inclusion of garments and shoes in the list of products eligible for zero duty under the US Generalized System of Preferences (GSP), which grants preferential or zero tariffs on exports by developing countries to the US market.

Trade and Industry Secretary Alfredo E. Pascual, who is currently in the US accompanying President Ferdinand R. Marcos Jr. official working visit, said during a press conference with the DTI beat late Wednesday night that he has already raised the Philippines’ request during a meeting with his US government counterpart.

Garments and shoes are not yet listed in the products eligible for zero tariff under the US GSP. “There is no formal negotiation yet, I just gave those products by way of why the renewal of the GSP is important to the Philippines,” he said.

The US GSP, however, expired in 2020 and still remained pending for reauthorization by the US Congress. The US GSP program covers a total 5,057 products or tariff lines or roughly 47.7 percent of the 10,600 total US tariff lines. The program allows duty-free entry  for 3,500 tariff lines or 70 percent of Philippine exports to the US.

President Marcos Jr. called for the renewal of the GSP program during a forum organized by the US-ASEAN Business Council and US Chamber of Commerce roundtable and reception during the visit.

Marcos said that a renewal of the of the GSP will boost trade and make US products that are made in the Philippines more competitive.

The Philippines saw a steady to increasing utilization rate of the US GSP, with an exception in 2017 due to the increased export of unclaimed GSP eligible products. Following that year, successive increase of utilization was recorded in 2018 and 2019 attributed to the expansion of additional duty-free treatment for twenty-three tariff lines of certain travel goods. While value of products which claimed US GSP decreased in 2020 at $1,557,286,518, mainly due to the pandemic, utilization rate remained at 74 percent.

In 2020, the Philippines ranked 5th globally among the beneficiary developing countries in terms of total claimed US GSP value, only behind Thailand, Indonesia, Brazil, and Cambodia.

So far, the executive branch of the US government has assured Pascual that they are fully supportive of the reauthorization. While the GSP scheme remains pending, exports to the US from its developing countries are now paying the regular or higher import duties, which could be reimbursed upon the approval of the new GSP.

The USGSP is a unilateral action on the part of the US to give preferential import duty to their developing trading partners. This means the US can also unilaterally stop its implementation or withdraw the benefits granted.