The letter pointed out that the Generalized System of Preferences (GSP), which was implemented in 1976 to promote economic growth in developing countries, resulted in tariff-free access for some 130 countries on 5,000 products shipped to the US.
However, it said while the programme had proven “largely beneficial” to all sides, with US manufacturers benefiting from lower cost inputs, it had been “exploited” by some beneficiary countries, which were blocking or restricting access of US products to their own markets.
“Unfortunately, barriers to US exports in GSP beneficiary countries are widespread and are often in flagrant violation of international obligations,” it said. “The barriers US products face in many GSP recipient nations are by no means trivial. They frequently rely on non-science-based sanitary or phytosanitary measures that have the effect of restricting or blocking access of US products to their markets.”
The coalition claimed this was inconsistent with the original intention behind the programme, which was to help ensure the compliance of US trading partners with their international trade obligations. It called on Congress to establish “clearer eligibility requirements that would revoke GSP privileges partially or fully from nations that fail to accord US products treatment consistent with international rules”, adding that special emphasis should be put on more advanced developing countries.
“The fact that these countries may maintain these restrictions on US goods while benefiting from unilateral preferential treatment for their products in the US market – and with little apparent concern about losing those tariff benefits – is clearly inconsistent with the intent of Congress, and we believe this must change,” it concluded.
The coalition wrote a separate letter to lawmakers, voicing a strong opposition to The African Growth and Opportunity Act (AGOA), which is similar to the GSP and due to expire in 2015.
The letter stated that AGOA recipient nations were maintaining barriers to US exports that went beyond those permitted in trade agreements and warned any extension of the agreement would remove the incentive to move towards reciprocal trade relationships.
“At a minimum, AGOA beneficiaries should be expected to refrain from erecting blatantly protectionist and WTO-incompatible barriers to our products. There must be some accountability for such actions, and giving countries long-term or permanent duty-free preferential access to the US market for their products does precisely the opposite,” it said.