US Considering Changes to Preferential Tariff Prog

U.S. Considering Changes to Preferential Tariff Program

USTR says one goal is to distribute the benefits more equally

By Bruce Odessey
Washington File Staff Writer

Washington -- The U.S. Generalized System of Preferences (GSP), a program of preferential tariffs for imports from select developing countries, is undergoing review in part to distribute benefits more equally, the Office of the U.S. Trade Representative (USTR) says.

In an October 6 press release, USTR said it would consider whether some countries have become so competitive in trade through increased exports that they no longer need GSP benefits.

USTR said that the top 10 beneficiary countries accounted in 2004 for 70 percent of the trade benefits, by trade volume of nonpetroleum GSP imports, while the remaining 129 beneficiary countries shared the rest.

The top 10 countries were listed as India, Brazil, Thailand, Indonesia, Turkey, Philippines, South Africa, Venezuela, Argentina and Russia. Altogether the 139 beneficiary countries exported more than $22 billion worth of goods to the United States duty free in 2004, USTR said.

The issue arises now because GSP authorization is scheduled to expire at the end of 2006. Before Congress considers reauthorization, USTR wants to consider whether to recommend changes on eligibility, effectiveness and duration, the agency said.

"Finding ways to ensure that countries share more equally in the benefits is a major objective," U.S. Trade Representative Rob Portman said in the release.

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