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US says some countries could lose their preferential tariff treatment

WASHINGTON, DC - 07/07/06 - The White House is reviewing requests to remove certain countries from the Generalized System of Preferences (GSP) program for not taking steps to recognize international workers' rights, and for not giving preferential tariff treatment to imports from other developing countries.

According to a media alert released by the Office of the US Trade Representative (USTR), the countries affected are Uganda for its "poor" adherence to international workers' rights' standards, and Pakistan, Kazakhstan and Brazil for their lack of intellectual property rights enforcement.

Last year, the US restored GSP eligibility to Liberia.

The GSP mechanism was established in 1974 to give developing countries duty-free access to the US and promote economic development in those countries.

The US can also revoke a country's GSP eligibility if US imports of a certain product from that country exceeded $120 million in 2005, or if imports from the country were more than 50% of total imports of that product from all countries, according to the alert.

At the same time, the US has determined that certain imports from selected developing countries no longer should be eligible for duty-free treatment under the GSP.

Most affected by the decision are imports of dried guavas, mangoes, and mangosteen fruits from the Philippines and Turkey's exports of travertine stone, which is used in the manufacture of tiles.

As a result of the Bush Administration's decision, US-based importers of those goods from the affected countries now must pay duties at normal tariff rates, the release said. .

The decision followed a 2005 review of the GSP.

Currently, 136 countries are GSP-eligible, exporting approximately 5,000 different products to the US.

In 2005, products valued at $26.7 billion were imported duty-free from eligible GSP beneficiary countries into the US, 18% more than in the previous year, the USTR said.

Most products imported from beneficiary countries are eligible for GSP benefits, with the exception of textiles and apparel products.

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