After a five-year downturn, the local labor-intensive garments industry is in for a revival, if House Resolution 3039 or Save Our Industries Act of 2009 passes the US Congress.
The bill, filed by James McDermott (D-Washington), aims to give preferential duty treatment to Philippine garments exported to the United States.
Once the bill becomes a law, the country’s export of garments to the US will grow from US$ 1.2 billion, last year’s figure, to between $3 billion and $3.5 billion in the first three years. In the same period, jobs currently at 200,000 will triple to 600,000.
Now pending before the House Committee on Ways and Means, the bill is anticipated to pass in the middle of next year.
President Gloria Macapagal Arroyo, however, is inciting for an early passage of the bill, preferably by end of this year, to help the economy still reeling under the continuing effects of the two consecutive typhoons three weeks ago. More bad news is the anticipation of rains that may be brought in by third Tropical Storm “Ramil” that was reported to be heading towards Central and Northern Luzon.
The government estimates the cost of rehabilitation and reconstruction at between P30 billion and P50 billion.
Rep. McDermott, through the bill, intends to provide more jobs in the US by exporting textiles to the Philippines. As the measure provides, the Philippines will then manufacture clothes and apparels out of the textiles and export the finished products back to the US at zero tariff instead of the standard 30 percent to 40 percent tariff.
The bill was prompted by the influx of cheap garments from China at the start of the year, which resulted in near-death of the US textile industry.
Garments is currently a poor second to electronics among the country’s top dollar-earners. In fact, garments generated only $ 771 million in the first semester of the year, 22.2 percent less than the year ago level. As in previous years, the United States was the country’s biggest market for garments, easily accounting for 60 percent of the total market.
Leading the industry lobby is the Garments and Textile Development Board GTDO, which was started a year ago by the President, herself a former executive director of GTDO’s predecessor, the Garments and Textile Export Board (GTEB), before she entered politics.
GTEB, the regulatory body for garment manufacturers in the utilization of garment quotas, was shut down in 2005 with the phasing out of quotas under the Agreement of Clothing and Textiles (ACT) of the World Trade Organization (WTO).
In its place, GTDO has come up with a quota-less road map for the industry, which is centered on securing a preferential trading arrangement with the United States and eventually with other major markets such as the European Union. (PNA)
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