Senate Ag Chair Calls for Changes to Duty-Free Trade Program

Generalized system of preferences program offers market access to countries that lack a competitive export program.

Senate Agriculture Committee Chair Saxby Chambliss is urging trade officials to take another look at the duty-free Generalized System of Preferences program the U.S. offers to countries with little or no export program. It turns out that India and Brazil are getting preferential treatment under the program and Chambliss is questioning that situation.

In a letter to U.S. Trade Representative Susan Schwab, Chambliss notes that these programs run counter to current trade rules, but have become an "important tool for U.S. trade policy." He notes the preferences are targeted toward countries that need the most help, and don't have a competitive export sector. However, Chambliss also notes that such a program should be "a mechanism that is temporary in nature and differentiates between the least developed economies and advanced developing countries."

Brazil and India, both beneficiaries of GSP, do not represent countries in need of export help. Chambliss notes that India and Brazil, the first and third leading beneficiaries under the GSP program, are competitive in ag exports, and strong competitors to the United States. In addition, he notes the program shouldn't reward governments that "threaten litigation against the United States, work against our negotiators in the WTO towards a more liberalized trade environment and disregard the intellectual property rights of U.S. companies." Brazil and India have been involved in all three of those issues.

Chambliss is asking the trade representative to consider revising GSP to "differentiate and exclude advanced developing countries like Brazil and India."

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