U.S. Chamber report endorses GSP renewal

U.S. Chamber report endorses GSP renewal    The country’s largest business federation released a report Wednesday backing the urgent renewal of a trade preference program that extends duty-free treatment to certain goods imported from specific developing countries.
   The Generalized System of Preferences is set to expire Dec. 31. The U.S. Chamber of Commerce plans to step up its lobbying on Capitol Hill during the next few weeks to ensure GSP renewal legislation is passed before the end of this congressional session.
   At a press conference in Washington, John Murphy, vice president for international affairs at the chamber, said the case for passage of GSP renewal legislation is “rock solid,” because it does not raise “the specter for import competition.”
   The chamber’s report notes numerous benefits of GSP for U.S. shippers, especially those involved in manufacturing jewelry, electrical equipment, transportation vehicle parts, chemicals, plastics and metals. In 2005, three quarters of U.S. imports using GSP were raw materials, with the remainder being finished goods.
   “Small companies are most anxious and motivated” for the renewal of GSP, said Laura Baughman, president of The Trade Partnership, which worked with the chamber on the report. She added that small manufacturing firms are “not just going up against China but big companies in the United States,” and GSP helps them to compete.
   Mark Smith, the chamber’s managing director for western hemisphere affairs, said GSP has been wrongly viewed as an “aid package” for developing countries. “Instead, it helps us with access to a supply of low cost goods,” Smith said.
   The report estimates that the annual sectoral benefits to consumers of GSP products reaches nearly $273 million. GSP also helped support about 82,000 U.S. jobs in 2005, the report said.
   Congress established GSP in 1974. By 2005, U.S. imports under GSP totaled $27 billion.
   The Bush administration is working on a review of GSP to determine whether to limit, suspend or withdraw the eligibility of those GSP beneficiaries for which the total value of U.S. imports under GSP exceeded $100 million in 2004. Other considerations in the review are whether a GSP beneficiary was classified as an upper-middle-income economy last year or accounted for more than 0.25 percent of international exports in 2005, as reported by the World Trade Organization.
   GSP beneficiaries that meet this criteria are Argentina, Brazil, Croatia, India, Indonesia, Kazakhstan, Philippines, Romania, Russia, South Africa, Thailand, Turkey and Venezuela. According to the Office of the U.S. Trade Representative, 22 countries have graduated from GSP since 1989, such as Hong Kong, Singapore, South Korea, Taiwan and Malaysia.
   The chamber wants the current GSP country and product enrollment to remain intact.
   “We’re looking for the most comprehensive (GSP) extension we can find,” Murphy said. “The more exclusions of products and countries, the value is reduced.
   “We’re in the business of growing the loaf,” he said.
   The complete chamber report is available online at https://www.uschamber.com/publications/reports/0610gsp.