Thursday, May 6, 2010
FIL-AMS TAPPED FOR HUGE TRADE BILL
Trade officials are asking Fil-Ams to help push two bills pending on Capitol Hill that will boost the US textiles and Philippine garments, saving or creating thousands of jobs on both sides of the Pacific.
The twin bills – House Resolution 3039 and Senate 3170 – also known as the Save Our Industries (SAVE Act), have won bipartisan support in the US Congress.
S. 3170 was sponsored by Senators Daniel Inouye, a Democrat from Hawaii, and Christopher Bond, a Republican lawmaker from Missouri.
H.R. 3039 was sponsored by Democratic Congressman Jim McDermott of Washington, and Republican Congressman Brian Bilbray of California.
Both bills are now under scrutiny at the committee level.
Philippine Trade & Industry Undersecretary Thomas Aquino is hoping the Fil-Am community can come together and exert the political influence needed to push the bills to the floor.
“US cotton and Pinoy power could be the winning combination,” he declared after a marathon teleconference with the Fil-Am community tonight.
He stressed that the SAVE Act featured a “win-win formula” that will aid both the troubled US textiles industry and Philippine garments manufacturers.
The deal could be worth $500 million for American fabric manufacturers and the equivalent of P350 billion (based on today’s exchange rate) for Philippine apparel makers by the 5th year of implementation.
More importantly, the bill aims to save or create jobs – an estimated 200,000 in the Philippines alone – and finally give Chinese garments some competition.
The SAVE Act would grant duty-free treatment to certain apparel made in the Philippines using US-made fabrics.
The US textiles industry is being strangled by cheaper cotton from China, Australia, New Zealand, Pakistan and other producers.
It was a victim of globalization and production overcapacity. At its peak in the late 1990s, US textiles and apparel exports amounted to almost $17 billion – about a third of US revenues.
Aquino explained the Philippines enjoy a comparative advantage in “needle-work” – the high quality of workmanship.
To a large extent, the Philippines garments industry was also a victim of globalization after the US ended its quota regime and opened its markets to cheaper Chinese products as part of concessions for joining the World Trade Organization (WTO).
Aquino emphasized that the SAVE Act “is worthy of support of the Fil-Am community that wants to come to the aid of both its native and adopted countries”.
For example, he said the SAVE Act could help popular Filipino brands like Bench, Cinderella, Bayo, and others penetrate the US garments market.
Under existing conditions they will be pressed to compete in the US because tariffs could range from 15 to 34 percent.
He admitted that some of the impetus for the US bills came from American businesses in the Philippines who were reluctant to move to China despite the market imperatives.
Not surprisingly, the SAVE Act has won adherents from both US and Philippine trade groups, among them the Confederation of Garment Exporters of the Philippines, Textile Manufacturers Association of the Philippines, American Apparel & Footwear Association, National Retail Federation and US Association of Importers of Textiles & Apparel, among others.
The SAVE Act could allow the US textiles industry to carve a foothold in the Asian market through the Philippines.
Aquino, in trying to sell Fil-Ams to the bills, said they could even join the business bandwagon by buying into franchises of top Philippine garments brands that may want to take advantage of opportunities in the US.
Aquino intimated “it took a lot of pain” to convince the government to invest in a lobby group.
But working with the US Congress, getting a good lobby group is a must. They’ve selected Sorini Samet & Associates, one of only a few specialist lobbyists in Washington DC, especially in the textiles and garments sectors. Its clients include JC Penney, Polo Ralph Lauren and Ann Taylor Stores, among others.
This lobby group recently won generous garments trade concessions for quake-ravaged Haiti.
Although the SAVE Act appears to have partisan support – a rarity here nowadays – officials say it’s too small to be a stand-alone bill.
Its supporters on Capitol Hill are searching for a bill to latch it on (much like the Filipino veterans compensation bill that was linked with the stimulus bill).
Philippine commercial counselor in Washington DC Romulo Manlapig said the SAVE Act “was clearly gaining traction on Capitol Hill”.
There are moves to fold the SAVE Act in the preference reform bill which is the Obama administration’s top agenda on trade reforms.
“This is useful to boost the political stock of any administration,” Aquino averred, adding that his statement is applicable to the US as well as the Philippines, which is just days away from choosing a new president.