US House bill to knock India out of favour

[Soldier4Christ]

A Republican bill to extend trade benefits for developing countries would knock key industries in Brazil, India and other countries out of the program, development groups said on Friday.

Oxfam America said it welcomed the bill introduced in the U.S. House of Representatives on Thursday by Ways and Means Committee Chairman Bill Thomas, a California Republican, but called for number of changes to be made.

"The exclusion of some developing countries from the GSP (Generalized System of Preferences) program is troubling, given the millions of poor people who are employed in sectors that directly benefit from duty-free benefits," said Raymond Offenheiser, president of Oxfam America, in a statement.

Oxfam said their initial analysis suggested that certain exports from Brazil, India, Argentina, Turkey and Venezuela could lose duty-free access to the United States under the legislation.

Democrats were expected to support the legislation in hopes of revisiting the issue next year, when they could control the House if they win a majority of seats in Nov. 7 elections.

The bill also provides new trade benefits for Haiti, which has been a priority for Rep. Charles Rangel of New York, the top Democrat on the Ways and Means panel.

Another section extends through September 2008 a provision expiring next year that allows African manufacturers to use fabric from Asian or other suppliers to make clothes they can sell in the United States without import duties.

That extension would allow thousands of African women to keep their jobs a while longer, but another provision requiring at least 50-percent African content beginning in October 2008 "could set the bar too high," Offenheiser said.

The United States' main trade benefits program for developing countries -- the Generalized System of Preferences -- expires on Dec. 31, as does a separate program for the Andean countries of Colombia, Peru, Ecuador and Bolivia.

The Bush administration favors renewing GSP, but is in the midst of a review that could kick many large developing countries like Brazil and India out of the program.

Many lawmakers, such as Senate Finance Committee Chairman Charles Grassley, an Iowa Republican, no longer want to provide duty-free treatment to products from major developing countries that are resisting U.S. pressure in world trade talks to open their own markets to more U.S. exports.

The bill would exclude India's jewelry sector from the program by barring duty-free treatment for any product from a developing country that has annual export sales of more than $1.5 billion, said Viji Rangaswami, an associate at the Carnegie Endowment for International Peace.

Another provision aimed at developing countries with a per capita income of more than $3,400 would deny duty-free access for Brazil's auto parts exports and other Brazilian sectors by barring USTR from issuing certain waivers, Rangaswami said.

The bill would not extend trade benefits for Andean countries. Peru and Colombia have negotiated free-trade pacts that lock in their duty-free access to the United States, but Bolivia and Ecuador have not.