On the heels of the disputes over the WTO talks between
the United States, the EU, Brazil and India in Potsdam,
Germany, last week, the United States is terminating
some trade benefits for India, Brazil and other developing
George W. Bush issued a proclamation implementing the
changes to the Generalised System of Preferences programme,
which provided US duty-free access for $32.6 billion
worth of goods from developing countries in 2006.
the action has its roots in a bill approved by Congress
in December, which provided new guidelines for determining
whether a particular product is eligible for duty-free
treatment under the GSP programme.
reforms were motivated by frustration in the US Congress
over Brazil and India''s role in the trade talks, and
were aimed at eliminating GSP eligibility for products
where developing countries had shown they could compete
officials accused the two leading developing countries
of making impossible demands for cuts in US farm subsidies,
while refusing to substantially open their own markets
to more US farm and manufactured goods.
United States is revoking duty-free status for Brazil''s
exports of brakes, brake parts and ferrozirconium, gold
jewellery and brass lamps from India, methanol from
Venezuela, wiring harnesses from the Philippines, gold
jewellery from Thailand and kola nuts from Ivory Coast
to the US market without paying US import duties, the
US trade representative Susan Schwab''s office said in
exported $1.6 billion in gold jewellery and $20 million
in brass lamps to the United States under the GSP programme
in the first 10 months of 2006, the USTR said when it
initiated its review last year.
minister Kamal Nath, who has been in Washington for
talks with US officials, issued a thinly veiled warning
on Thursday of consequences if the United States cut
the trading benefits saying, "We will take note
... If and when the moment comes, we''ll remember it
Charles Grassley, an Iowa Republican who pushed hard
for the changes, said,
"I''m increasingly questioning why we provide preferential
treatment at all to products from countries such as
Brazil, India, and Venezuela ... (which) have actively
worked against the trade interests of the United States."
revamped GSP programme allows the Bush administration
to revoke duty-free treatment when imports 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 product.
trade officials said they terminated eligibility for
21 products as a result of their review, but maintained
eligibility for 115 exports from countries whose trade
exceeded statutory limits in 2006.