U.S. to Review Trade Preferences Following Collapse of Doha Talks

Original Publication Date: 
6 August, 2006

WASHINGTON -- Russia, Brazil, India and 10 other countries could lose preferential trade benefits under a review announced Monday by the Bush administration.

U.S. Trade Representative Susan Schwab said the administration wanted to determine whether certain countries should be excluded from the Generalized System of Preferences program which grants duty-free treatment for goods from 133 developing countries.

"One of the concerns that Congress has raised is that GSP benefits go largely to a few countries, while many developing countries are not trading much under the program. We want to ensure that we are operating the program as Congress intended," Ms. Schwab said in a prepared statement.

The review follows complaints from some in Congress that countries such as Brazil and India, which get duty-free benefits from the U.S., haven't been helpful in efforts to achieve agreement in the Doha global trade talks. Those talks, under the auspices of the 149-nation World Trade Organization, collapsed last month when the U.S. and other nations weren't able to break an impasse over ways to lower barriers to agricultural goods.

Senate Finance Committee Chairman Charles Grassley said in July that the current GSP program, which expires Dec. 31, shouldn't give benefits to countries such as India and Brazil. "Countries that don't want to give us access to their markets in the WTO negotiations, why should we continue to give them preferential treatment?" asked Mr. Grassley, whose committee would have jurisdiction over any legislation to extend the GSP program.

The administration Monday asked for public comments on whether the duty-free trade benefits should be limited or withdrawn from countries whose shipments to the U.S. exceeded $100 million in 2005 and met one of two other criteria. The other criteria were that the country was classified as an upper-middle-income economy by the World Bank in 2005 or that the country's total exports in 2005 equaled 0.25% or more of all global exports.

The countries currently participating in America's GSP program that meet those guidelines are Argentina, Brazil, Croatia, India, Indonesia, Kazakhstan, Philippines, Romania, Russia, South Africa, Thailand, Turkey and Venezuela, according to information supplied by Ms. Schwab's office.