U.S. May Slash Trade Benefits for 13 Nations

The United States will review whether to withdraw longtime trade benefits for India, Brazil and 11 other advanced developing countries, U.S. trade officials said Monday.

The decision follows the recent collapse of world trade talks, which many members of Congress blame on the reluctance of large developing countries such as India and Brazil to open their markets to more foreign goods.

In announcing the review, U.S. Trade Representative Susan C. Schwab said the administration wanted to determine whether certain countries should be excluded from the Generalized System of Preferences, a program that grants duty-free treatment for thousands of goods from 133 developing countries.

“One of the concerns that Congress has raised is that GSP benefits go largely to a few countries, while many developing countries are not trading much under the program,” Schwab said in a statement.

The United States imported $26.7 billion worth of goods under the program in 2005. The 32-year-old program expires at the end of the year unless it is renewed by Congress.

With that deadline looming and many key lawmakers opposed to renewal, the Bush administration will review whether to “limit, suspend or withdraw” the eligibility of 13 countries that shipped more than $100 million worth of goods to the United States under the program in 2005 or accounted for more than 0.25% of world goods exports, Schwab’s office said.

The targeted countries include Argentina, Brazil, Croatia, India, Indonesia, Kazakhstan, the Philippines, Romania, Russia, South Africa, Thailand, Turkey and Venezuela.

The Bush administration will also consider whether to withdraw presidential waivers that give those 13 countries and six others unlimited duty-free access for certain products.

Kamal Nath, India’s commerce and industry minister, told Reuters in New Delhi that he couldn’t comment on the possible loss of the program’s benefits until he received complete details. India is one of the biggest beneficiaries of the program.

Brazilian Trade Minister Luiz Fernando Furlan told journalists in Sao Paulo that the move was at odds with a recent U.S.-Brazilian initiative to increase trade.

“Unilateral measures are always a bad option.... [They] will hurt the companies that operate in both countries and create an unfavorable climate for the evolution of bilateral relations,” Furlan said.

A coalition of business groups, think tanks and activist organizations are expected to push for renewal of the program, which saved U.S. businesses an estimated $923 million in 2005 while helping to provide jobs in developing countries.

“If you don’t renew it, you’re going to have some adverse consequences” for such United States allies as Iraq, Afghanistan and Turkey, said Viji Rangaswami of the Carnegie Endowment for International Peace in Washington.