THE USA'S PROPOSED SCHEME OF GENERALISED PREFERENCES.
Background
The USA's proposals for a GSP scheme are contained in the Trade Reform Bill. This bill has suffered considerable delays in passing through the legislative
procedures and it is still not clear, when it will become law. The main
provisions of the scheme are described in the attached note. Since the US absorbs
about 50% of world imports from developing countries, Hong Kong will be keen to
see it implemented as soon as possible.
Problems for Hong Kong
2
3
Two aspects of the scheme are likely to be of particular concern to Hong Kong.
(i)
Coverage
Textiles and footwear, both major exports for Hong Kong are excluded.
(ii)
safeguards
4 The scheme limits preferential imports of any one item fron an individual developing country to a maximum of $25m, or 50% of the total value of US imports of
that item. Thus developing countries with a considerable export capacity will
find their benefits under the scheme limited. This provision has been sharply
criticized by Brazil et al in UNCTAD, The US justify it on the grounds that the
purpose of the scheme is to help new exporters get a toe-hold in the market.
The Hong Kong representatives will be concerned that their entitlement to
preference will be limited on many major export items eg 05.15 radiotelegraphic and radiotelephonic transmission and reception apparatus, 97.02 dolls, 97.05
other toys.
5 The scheme contains a further restriction preference will be withdrawn
from any item subject to import restrictive measures imposed outside GSP eg
countervailing action, It is not clear how far Hong Kong's exports are likely to
be affected by this.
6
The Hong Kong representatives may invite us to make representations to the
US government about the above points.
1
No comments yet.
Private notes are available after approval.