US stops duty free imports of gold necklaces from India

July 1st, 2008 - 11:20 am ICT by IANS  

By Arun Kumar
Washington, July 1 (IANS) Indian exports of gold necklaces and related products to the US will no longer get duty-free treatment under the Generalised System of Preferences (GSP). Necklaces including neck chains other than of rope or mixed links from India figure among 25 products from developing countries for which the waiver on eligibility under GSP has been revoked after an annual review, the US Trade Representative’s (USTR) office announced Monday.

The waiver on thresholds known as “competitive need limitations” (CNLs) has been revoked as in administration’s view these products can compete effectively in the US market without duty-free treatment and will no longer be eligible under the GSP programme covering 5,000 products from 132 countries.

In 2007, these imports were valued at approximately $1.4 billion. Indian exports of gold necklaces and related products totalled $266 million. This group includes 21 products that exceeded the statutory CNLs and four products that have had waivers to the CNLs for the past five years and are now subject to statutory “super-competitiveness” thresholds.

In addition essential oils of peppermint (Mentha piperita), which accounted for $17 million imports from India, and tobacco, partly or wholly stemmed/stripped, which totalled another $55,050, have been added to CNL exclusions.

However, a host of other products from India including cucumbers; dried leguminous vegetables; mangoes prepared or preserved by vinegar or acetic acid; and sandstone, merely cut into blocks or slabs of a rectangular shape will continue to receive the waivers.

Congress passed tougher criteria for the GSP programme in December 2006 partly because what some lawmakers described as frustration with India and Brazil’s role in the Doha round of world trade talks.

Republican senator Charles Grassley for one was cited as saying they were annoyed India and Brazil received duty-free treatment under the programme but were refusing in the Doha round to open their own markets to more imported goods.

As a result of this year’s review, duty-free treatment for the vast majority of products covered by GSP will continue, USTR said.

In addition, the administration will continue GSP eligibility for 99 exports from 15 countries, with an approximate import value of $422 million in 2007, though the quantities of those exports exceeded statutory thresholds in 2007.

Three types of aluminium products have also been added to the list of GSP-eligible products from all beneficiary countries.

“Congress created the GSP programme to serve as a bridge for developing countries as they increase their participation in the global trading system,” USTR Susan C. Schwab said.

“The GSP programme has helped to promote development and reduce poverty in the developing countries while expanding our bilateral trade. It has also helped make the United States one of the world’s most open economies to products of developing countries.”

Concurrent with the 2007 Annual Review, the administration completed a review of the steps taken by GSP countries to eliminate the worst forms of child labour, including bonded labour, in the production of seven categories of handmade carpet imported under the US GSP programme.

Since becoming eligible for GSP in 2005, US imports of these carpets from 23 GSP beneficiaries have grown from $11 million in 2004 to $119 million in 2007. As a result of the review, the administration made no changes to the GSP eligibility of the carpets under review, but will continue to monitor these countries, USTR said.

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