The Office of the U.S. Trade Representative released the results of its 2019 Generalized System of Preferences product review. Changes, which take effect Nov. 1, include new GSP eligibility for orchids from Thailand and certain types of plywood from Indonesia. USTR denied petitions to remove polyethylene terephthalate from Pakistan from GSP eligibility, as well as a competitive needs limitation (CNL) waiver for stearic acid from Indonesia, which will now be ineligible for GSP. USTR also said that subheading 8702.10.21, for motor vehicles with diesel engine, to transport 16 or more persons, from North Macedonia will also be ineligible for GSP after exceeding CNL import limits.
The Office of the U.S. Trade Representative, as part of a broader announcement on changes to the Generalized System of Preferences, announced late Oct. 25 that about a third of Thailand's GSP-covered trade will exit the preferences program April 25, 2020, because it does not allow its workers to participate in collective bargaining and other labor rights, despite six years of engagement. The USTR said all seafood products are being removed from the program because of abuses of workers in that industry and in shipping; other products were chosen because Thai imports are a small share of the U.S. imports, but the U.S. is relatively important for Thai exporters. In all, GSP imports from Thailand were $4.4 billion last year, USTR said; after India's exclusion from the program earlier this year, Thailand accounted for the highest volume of exports qualifying for GSP. Even with the reduction, it will still be the largest beneficiary. The Associated Press reported Oct. 28 that Thai officials will seek to talk about averting the eligibility changes.
India blocked a first request from the U.S. for the World Trade Organization to form a panel to judge whether the hike in tariffs that India instituted because of the U.S. tariffs on Indian steel and aluminum breaks the rules. The panel is automatically convened after a second request. India delayed retaliating for the Section 232 tariffs for many months, but put them in place after the U.S. removed India from the Generalized System of Preferences benefits program.
A bipartisan bill was recently introduced to remove Burma from the Generalized System of Preferences benefits program over its ethnic cleansing of Rohingya Muslims. The lead sponsor, Rep. Brad Sherman, D-Calif., is the Foreign Affairs Subcommittee chairman for Asia, and he was joined by Rep. Ann Wagner, D-Mo. “We cannot shy away from calling Burma’s persecution of the Rohingya people what it is: a genocide. The victims of these atrocities have fled their homes and are still suffering, despite the international community’s efforts to care for the refugees,” Sherman said in a press release announcing the bill. “The Rohingya need to be able to voluntarily return home safely and with dignity, and Congress should use all of its leverage available to pressure the Burmese government to make this happen.” Burma received tariff breaks on $117 million worth of exports in 2018, according to the Office of the U.S. Trade Representative. When India and Turkey were still enrolled, Burma ranked 16th among beneficiary countries. The leading exports from Burma covered by GSP were travel goods, dried beans, aluminum, honey, and preserved fruits and vegetables.
President Donald Trump was silent on trade frictions when he appeared before tens of thousands of Indian-Americans in Houston on Sept. 22. On stage with him, India's Prime Minister Narendra Modi only hinted at a possible solution to India's expulsion from the Generalized System of Preferences benefits program (see 1909060029). According to a transcript of the event issued by the White House, Modi said that over the next two to three days, he and Trump would discuss economic issues. "I hope that from these discussions as well we will have very positive results," he said. "By the way, President Trump calls me a tough negotiator. However, he himself is quite an expert in the 'art of the deal.' And I am learning quite a lot from him."
Rep. Jim Himes, D-Conn., who led a letter asking for at least partial Generalized System of Preferences benefits restoration for India (see 1909170071), said he has no insight into whether any will be restored, partially or in whole. "I don't have any particular access to [White House economic adviser Peter] Navarro or [President Donald] Trump's thinking," Himes said in a brief hallway interview Sept. 19 with International Trade Today. "I hope so, it's important to my district." Tasty Bite, which imports packaged pre-cooked vegetarian Indian dishes that are sold in grocery stores, is headquartered in Stamford, Connecticut. "The non-GSP world makes their life more challenging."
Rep. Dan Newhouse, R-Wash., sent a letter to U.S. Trade Representative Robert Lighthizer asking him to prioritize the removal of Section 232 retaliatory tariffs from India, which have resulted in a 70 percent tariff on U.S. apples in that country. Before the U.S. hit Indian steel with 25 percent tariffs, U.S. apples were taxed at 50 percent in India. India held off on retaliation for more than a year, but when the U.S. announced it would terminate India's eligibility for the Generalized System of Preferences benefits program, it responded in kind (see 1906170053).
A group of 26 Democrats and 18 Republicans in the House of Representatives sent a letter to U.S. Trade Representative Robert Lighthizer asking that India be at least partially restored to Generalized System of Preferences eligiblity. The Sept. 17 letter, led by Rep. Jim Himes, D-Conn., and Rep. Ron Estes, R-Kan., said that they take the market access complaints seriously, but asked that if there is progress on any front, the administration consider partially restoring GSP in exchange for India resolving "some individual issues." The Congress members said that companies are being harmed by new tariffs due to the GSP termination.
The following lawsuits were filed at the Court of International Trade during the week of Sept. 9-15:
International Trade Today is providing readers with some of the top stories for Sept. 9-13 in case they were missed.