Brazil Calls US Threat to Drop Preferential Tariff Unfortunate Pressure Tactic

Brazilian Foreign Minister, Celso Amorim, said it would be an "unfortunate" gesture if the United States excluded Brazil from the General System of Preferences which benefits exports of developing countries.

Earlier this month, the United States said it would review the GSP which allowed US$ 26.7 billion in imports from eligible developing countries in 2005. Among countries targeted to be withdrawn from the list are 13 developing economies including Brazil, Argentina and Venezuela, as well as India and Russia.

U.S. Trade Representative Susan Schwab has called for the first review of the program in 20 years, which expires next December 31 and could determine if some advanced developing countries should "graduate" out of the favored trading status.

Comments are due by September 5. "It would be unfortunate" Amorim told journalists. "It’s a gesture that would be difficult to understand at a time when we are trying to strengthen cooperation. But I hope it doesn’t happen."

United States announced it will review trade preferences following the suspension of the World Trade Organization, WTO, Doha Round talks earlier this month. Many US congressmen blamed the failure on the reluctance of large developing nations like Brazil and India to open their economies further.

Amorim described the US announcement "a poorly aimed pressure tactic" and said developing nations like Brazil "are not part of the problem but rather the solution" to successful WTO negotiations.
He went on to call the move if it finally becomes effective "inefficient, unjust and counterproductive."

Brazil would lose and estimated 300 to 400 million US dollars in annual exports if the GSP trade benefits are cancelled, according to the American Chamber of Commerce in Sao Paulo. GSP programme waives import tariffs on 3,400 Brazilian products. Last year Brazil exported 24.4 billion US dollars to United States and 3.6 billion came from products covered by the GSP programme.

The 32-year-old GSP programme waives import duties on thousands of products from 133 developing countries and expires at the end of the year unless renewed by Congress.

Mercopress

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