Monday, January 3, 2011
SAVE ACT: LAYING DOWN THE PREDICATE OF MUTUAL NEED
Saving the “SAVE Act” is going to be one of the top lobbying priorities of the Philippines in the 112th Congress.
The “SAVE Act” – Senate 3170 and House Resolution 3039 – was filed in the 111th Congress to give preferential treatment for Philippine garments made from American textiles.
The bills enjoyed partisan support in the past Congress – introduced in the House by Democratic Rep. Jim McDermott of Washington, it has drawn support from Republican Reps. Brian Bilbray and David Dreier of California, and Judy Biggert of Illinois, among others.
In the Senate, the bill was jointly sponsored by Republican Sens. Christopher Bond of Missouri and John Ensign of Nevada; and Hawaii Democratic Sens. Daniel Akaka and Daniel Inouye.
Philippine officials tried to have the bills approved during the lame-duck session but failed.
The lobby will have to continue under a very different Congress, with spending-conscious Republicans now controlling the House and traditionally sympathetic Democrats enjoying a thinner majority in the Senate.
For one, supporters will have to look for new GOP champions after both Bond and Ensign retired from the Senate.
Proponents say the “SAVE Act” is backed by major US textile mills, apparel trade associations, clothing manufacturers and wholesalers like Ann Taylor, Avon, Columbia Sportswear, Liz Clairborne, Natori, Polo, Ralph Lauren and Urban Apparel.
The bills’ rationale was to expand the market for US yarn and textiles by allowing tariff-free access to the Philippines, generating local demand and ultimately, creating as many as 3,000 new American jobs.
Under this scenario the lower cost of raw materials will help Philippine garments compete with bargain-priced but lower quality Chinese apparel in America as well as the Asian market that US wholesalers have been eyeing for a long time.
The demand for cotton is rising even amid higher production, leading to the commodity’s highest prices in over a decade.
New York cotton futures prices reached 150 cents per pound in early November before settling down to 112 cents per pound. The website said the 75 cents per pound trading range in the New York futures market is the highest since the 1995-96 crop season.
Of the 4.6 million metric tons of cotton produced in the US in the 2010-11 season, 3.4 million tons will be exported and 800,000 metric tons will be consumed by US textile mills.
Higher raw materials could adversely affect textiles producers in the US and the rest of the world.
The US textiles sector is already facing stiff competition from countries like China and Vietnam where textile and garments exports are projected to top $11 billion this year making it the 2nd largest textile exporter to America.
From 1997 to June this year, a total of 1,298 textile mills have been shuttered according to the National Council of Textile Organizations (NCTO).
Most of these factories are located in North and South Carolina, Georgia and Virginia.
There is a significant Fil-Am population in three of these four states.
Allen Gant, vice chair of the American Textile Manufacturers Institute, estimated that the US textile and apparel sector has lost 323,000 jobs even before the recession flared in late 2008.
Clearly, there are challenges and opportunities for the renewed Philippine lobby in Congress.
The campaign can be waged on several levels – the Philippine’s “comparative advantage” isn’t necessarily limited to the nuances of garments-making, but also to the larger politico-economic concerns of concerned vested interests, power blocs and lawmakers promoting their constituent’s agenda.
A vigorous education and information campaign is critical to this effort.
The Fil-Am community, especially in the states that stand to benefit most from the “SAVE Act” will be crucial.
But the bill’s supporters should continue to reach out to the rest of America, especially those people and groups who can amplify the message that America needs the “SAVE Act” just as much as Filipinos.
Unless this predicate of mutual need and benefit is firmly established, we fear this bill will go nowhere.