• Obama should help save SAVE Act

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    President Benigno Aquino III has yet to meet with US President Barack Obama at the time of this writing. I don’t know how much you could really discuss with the US President on such a short visit or how substantial these discussions are going to be. It is very likely that China’s intrusions into Philippine territory and the US commitment to help with our country’s security would be discussed.

    When Obama visited Japan as part of his Asian trip last week, he reassured the nation that it will abide by its commitment to help Japan once China seizes the Senkaku Islands, which has of late soured ties between Japan and China.

    With the Enhanced Defense Cooperation deal allowing American soldiers greater access to local military bases expected to be signed to coincide with Obama’s visit, we expect more security cooperation from the US.

    There is nothing wrong with the US government increasing joint military exercises with the Philippines in a bid to offset the increasing influence of China in the region.

    The Philippines has a Mutual Defense Treaty with the US after all.

    It may not be an end-all solution to help peacefully resolve our escalating tensions with China concerning various islands within our territorial waters, but faced with China’s display of irresponsible militarism, our collective attitude should be “let’s get all the help we can get.”

    I hope though that President Aquino could also personally lobby for the Save Our Industries Act, a bill in the US Congress that would enable the freer entry of Philippine-made garments into the highly lucrative US market.

    The SAVE Act needs to be revived in the US Congress after it failed to pass in the 111th and 112th Congresses. And the Philippine government is looking for new sponsors after the bill’s primary sponsor and champion, Hawaii Senator Daniel Inouye, passed away last year.

    Hopefully the SAVE Act could not only be re-filed but passed in the 113th US Congress, of course with the support of the Obama administration and key American legislators.

    I don’t think President Aquino would be out of line if he personally lobbies for the SAVE Act.

    Mr. Aquino’s popular mandate puts him in a superb position to influence not only the US President but key US legislators to approve the bill. He needs to move fast so that the bill would have a chance this time around. It did not even get past the committee level in the last US Congress sessions.

    One of the many hurdles to the bill is China’s special-interest group.

    China controls 42 percent of the apparel market in the US. The Philippines’ share is only 1 percent.

    SAVE Act is named accordingly because it is meant to “save” or rescue the moribund US textile industry, but it would also benefit the Philippines’ labor-intensive garments industry in a big way because it would allow Philippine-made garments using American fabrics greater access to the US market for men’s, women’s and children’s apparel, worth some $200 billion annually.

    Ready-to-wear (RTW) clothes made in the Philippines using American textiles would enjoy definite advantages such as duty-free privileges, thus making them even more price-competitive when they reach US stores.

    This will surely encourage more apparel makers from the US to build new factories here, bring in American textiles, harness skilled Filipino workers to design, cut and sew the garments, and then re-export the RTW clothes back to the US.

    They will be driven to do this because once their Philippine-made garments are shipped to America they will enjoy higher margins not just because of the low cost of production here, but also owing to the reduced if not zero US tariffs.

    The SAVE Act’s backers are predicting 10 to 12 percent lower production costs in the Philippines than in China.

    The bill is obviously mutually beneficial to the Philippines and the US. It will spur thousands of new jobs, both in our labor-intensive garments industry and in America’s textile sector.

    Garments are already our second-largest export to the US, after semiconductors. The local garments industry, now employing some 150,000 Filipinos, could easily add 100,000 new jobs once the US bill is enacted. In its heyday it provided jobs to 600,000 Filipinos and accounted for export receipts of about $3 billion.

    Local contract manufacturers for American apparel makers would also benefit. The Philippines already has a solid reputation when it comes to the manufacture of garments meant for American stores, particularly the high-end ones. Some of these brands have already expressed support for the bill.

    The American firms likely to be drawn to the Philippines include Polo Ralph Lauren Corp., Levi-Strauss & Co., Guess? Inc., Urban Outfitters Inc., Aeropostale Inc., American Eagle Outfitters Inc., Pacific Sunwear of California Inc., Hot Topic Inc., Abercrombie & Fitch Co., True Religion Apparel Inc., The Gap Inc.;

    Limited Brands Inc.; Buckle Inc.; The Wet Seal Inc., Zumiez Inc., J. C. Penney Co. Inc., Sears Holdings Corp., AnnTaylor Stores Corp., Cache Inc., The Cato Corp., Charming Shoppes Inc., Chico’s FAS Inc., Christopher and Banks Corp., J. Crew Group Inc., Bebe Stores Inc., The Talbots Inc., New York & Co. Inc., and Coldwater Creek Inc.

    Many of the American firms are specialty apparel retailers or department stores that produce their own lines of clothing for men, women and children, and some of them already have existing Philippine facilities.

    So how about it President Aquino? Can the garments industry count on your personal endorsement of the SAVE Act to President Obama?

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