U.S. Considers Removing All Tariffs for Poor Nations

By | July 8, 2011

The U.S. government said on Friday it is investigating the probable economic effects of eliminating all tariffs and quotas on goods from the world’s least-developed countries (LDCs).

The U.S. International Trade Commission said it would report its findings to the U.S. Trade Representative’s office in February, two months after a key World Trade Organization meeting at which Washington will be under pressure to agree to a “duty-free, quota-free” package for LDCs.

As part of the long-running Doha round of world trade talks, WTO members agreed in December 2005 on the broad outlines of a duty-free, quota-free package.

Nearly six years later, a final agreement in the Doha round still appears out of reach, so members are discussing a possible interim deal this December aimed primarily at helping the poorest members.

U.S. negotiators in 2005 insisted on a provision that would allow Washington to maintain tariffs and quotas on 3 percent of products from LDCs to protect import-sensitive U.S. industries such as textiles and sugar.

The United States, like other developed countries, has long let many goods from developing countries enter without duties.

But the main program known as the Generalized System of Preferences expired at the end of last year and has not been renewed because of a Republican senator who objected to duty-free treatment on sleeping bags from Bangladesh.

President Barack Obama’s administration and senior lawmakers are working to renew that program as part of a package of other trade legislation.

The International Trade Commission said it would examine the effects of eliminating the duties on U.S. industries, consumers and free trade partners as well as poor countries that already have preferential access to the United States.

This is the second time the commission has studied the issue for the U.S. Trade Representative’s office. The earlier report, done in 2007, was never released publicly and it is likely the new one will not be either.

Meanwhile, two senators urged U.S. Trade Representative Ron Kirk on Friday to press in WTO talks for an agreement to curb foreign fisheries subsidies they said encourage overfishing and hurt U.S. companies.

WTO Director General Pascal Lamy has identified fisheries subsidies as one area of possible agreement by December, along with a duty-free, quota-free package.

“We believe strong provisions to reduce and control global fisheries subsidies are a ‘must have’ for the United States at the WTO,” Senators Rob Portman and Ron Wyden said in a letter.

(Reporting by Doug Palmer; editing by John O’Callaghan)

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