NTFC Calls For Reform of US Trade Preferences for Developing Countries

by Leroy Baker, Tax-News.com, New York

30 April 2009

The National Foreign Trade Council (NFTC) has joined other leading business and non-governmental organizations in urging the United States Congress and the Obama administration to reform and renew US trade preference programs for developing countries.

In a letter sent to the US Trade Representative and the Chairmen and Ranking Members of the Senate Finance Committee and the House Ways and Means Committee, the organizations outlined suggestions for preference reform.

"Trade preference programs play a significant role in promoting economic growth and development both at home and abroad. These programs provide tangible economic opportunities for the citizens of developing countries, and it is in our national interest to pursue policies that help reduce poverty among the world's poorest populations," said NFTC President Bill Reinsch. "Preference reform coupled with the successful conclusion of the Doha Round will help stimulate the global economy and deliver significant benefits to developed and developing countries."

"To help counter the negative impact of the global economic downturn on developing countries, it is imperative for Congress and the Administration to seek timely renewal of expiring trade preference programs," said NFTC Vice President for Regional Trade Initiatives Chuck Dittrich. "The United States should not stop there, however. We urge policymakers to go a step further to reform trade preference programs to ensure their effectiveness in delivering benefits and addressing unmet needs. Doing so will not only benefit less developed countries, but will also help US companies and workers to remain competitive by decreasing the cost of needed manufacturing and other inputs."

In addition to the NFTC, which represents hundreds of companies and advocates free global trade, the letter was signed by 28 other organizations, including Bread for the World, Business Roundtable, the Corporate Council on Africa, the National Retail Federation, Oxfam America and the US Chamber of Commerce.

The letter included a joint proposal for US preference program reform, which called for the establishment through legislation of a simple, unified US trade preference program enhanced benefits for least developed countries, sub-Saharan Africa and designated low middle-income countries, including extension of duty-free, quota-free market access for all products.

In October 2008, Congress approved legislation that renewed the Generalized System of Preferences (GSP) for one year and the Andean Trade Preference Act (ATPA) for up to one year in certain circumstances.

The GSP has been in effect since 1976 and is the basis for all US trade preference programs. The program provides preferential treatment for 4,650 products from 144 developing countries, including 43 least-developed countries. Prior to the passing of the legislation, the GSP was due to expire on December 31, 2008.

The legislation renewed ATPA for one year for Colombia and Peru, six months for Bolivia and Ecuador, plus an additional six months for the latter two countries on the proviso that they satisfy the ATPA criteria.

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