The Office of the United States Trade Representative (USTR) very recently announced (25 November 2015) that the Country Review of the Philippines with respect to Labor Rights under the US Generalized System of Preferences (GSP) has been formally closed. The USTR statement said that the decision to close the review is “..based on progress by the Philippine government in addressing worker rights issues in that country, including through reforms of labor laws and regulations.”

“The US acknowledges our initiatives towards creating decent jobs and upholding workers’ rights. The closing of the GSP country review on the Philippines is indeed a major milestone for Philippine trade and labor,” said Department of Trade and Industry (DTI) Undersecretary Adrian Cristobal Jr.

The US GSP aims to promote economic growth and development in developing countries through preferential and duty-free entry to the US market of products from 122 designated beneficiary countries (DBCs) and territories, including the Philippines.

The trade benefits, however, are tied to conditionalities, which include intellectual property rights protection, upholding of workers’ rights, and protection against child labor.  The list of GSP eligible countries and articles may be modified in response to a petition and based on the findings of the annual review. The GSP country review on Philippine labor standards and practices focused on monitoring the country’s progress on labor-related issues and labor reform legislations. The country review began in 2008.

In 2013, Philippine exports under the US GSP reached US$ 1.256 billion, making it the 5th largest user of the program.  Major Philippine exports under the US GSP include: measuring and checking instruments, appliances and machines ($78.2 million); other cane sugar ($ 74.8 million); telescopic sights for rifles not designed for use with infrared light ($61.9 million); other acyclic monoamines and their derivatives ($60.4 million); and insulated electric conductors ($60 million).

The US GSP program covers a total of 5,000 products or tariff lines or roughly 47% of the 10,600 total US tariff lines:  3,500 of which are open for all BDCs while an additional 1,500 products are given to the least-developed beneficiary countries.  The GSP program includes most dutiable manufactures and semi-manufactures, and selected agricultural, fishery, and primary industrial products.  However, other products are prohibited by law from receiving GSP treatment. These include most textiles, watches, footwear, handbags, luggage, flat goods, work gloves, and other leather apparel. In addition, any other articles determined to be import-sensitive cannot be made eligible for GSP such as products of steel, glass, and electronics.

This issue has been in the forefront of the DTI-led Trade and Investment Facilitation Agreement (TIFA) meetings between the US and the Philippines and in various bilateral meetings with the US including representations by the Philippine Embassy in Washington D.C. led by Ambassador Jose L. Cuisia, Jr.

“The hard work and excellent collaboration among the Department of Labor and Employment, Department of Trade and Industry, Department of Foreign Affairs and the Philippine Embassy in Washington D.C. made this possible,” said Cristobal.

The US GSP program was instituted on 2 January 1976, and authorized under the US Trade Act of 1974 for 10 years. It has been renewed periodically since then by the US Congress.  The current program is effective until December 2017.