India Could Lose Duty-free Access To US

Economic Times writes:

The United States Trade Representative has identified six countries, including India, which could lose duty-free access to the American market in 2007 under a revamped trade programe signed into law by President George W Bush.

Brazil, India and Venezuela along with Thailand, the Philippines and the Ivory Coast could lose trade benefits because of recent changes Congress made to the US Generalized System of Preferences (GSP) program for developing countries, the chief American trade negotiator said.

Under the current revamped GSP programme, the administration can revoke waivers when one of two conditions have been met: import of a certain good from one country exceed an annual cap of about $187.5 million, or comprise 75 per cent of total US imports of that good.

According to USTR statistics, a preliminary assessment shows that India would lose duty-free access for gold jewellery and brass lamps. The country shipped $1.6 billion in gold jewellery and $20 million in brass lamps to the United States under the GSP program in the first 10 months of 2006.

And Brazil stands to lose duty free access for brake and brake parts, which totalled $242 million in January through October, and for ferrozirconium, which totalled $700,000; and Thailand also would lose duty-free access for gold jewellery, of which it shipped $611 million to the United States in first ten months of 2006. Bush signed the legislation that continued the Generalized System of Preferences (GSP) program for two years until December 31, 2008.

The GSP program has proven to be very successful in creating US trade with and development in developing countries. Congress provided new guidance to address product competitiveness when it extended the program. "We will ensure that the program adapts so that it continues to assist developing countries in becoming more active participants in the global trading system," USTR Susan Schwab said.

The expectation is that the USTR will issue a Federal register notice in February 2007 which will identify those waivers that meet either of the new thresholds and thus subject to potential revocation.

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