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US shelves trade, tariff concession package

US shelves trade, tariff concession package

Author: Sajid Aziz
Publication: The Jung, Pakistan
Date: November 28, 2001
URL: http://jang.com.pk/thenews/nov2001-daily/28-11-2001/business/b1.htm

Karachi: The US government has shelved the plan to extend a package of trade and tariff concessions to Pakistan as compensation for the colossal losses the country's trade with US had suffered in the wake of September 11 incidents, sources said here Tuesday.

The trade sources in Karachi quoted their buyers in New York saying "The administration shelves plan to increase quotas and tariff cuts on Pakistan's apparel products. The Bush Administration has all but given up its efforts to extend tariff and quota concessions to Pakistan in connection with its cooperation in the US anti-terrorism campaign after its proposals met with opposition from US textile industry interests and their supporters in Congress".

They informed that the decision came after the House Ways and Means Committee Chairman, Bill Thomas argued that concessions of the type the administration was proposing would cause a backlash among members from textile states that could increase the difficulty in passing a fast-track bill in the house this year. On the other hand, the USTR's Special Textile Negotiator, Kevin Koonce who was assigned the job only three weeks ago, has resigned from his post. His resignation caught both industry and government officials by surprise. So far no reason has been provided for his resignation.

It is reported that three out of five CITA (Council for Implementation of Textile Agreements) representatives have acknowledged that Bush Administration has not completely given up on the idea of cutting tariffs and increasing quota ceiling for Pakistani textile and apparel products, the proposals "were on the shelf for the time being". The package of benefits the US is extending to Pakistan includes some modest concessions, but these benefits fall far short of what Pakistan is seeking. The administration has asked Congress to pass legislation to extend duty-free treatment under GSP (generalised system of tariff preferential), to two categories of products not currently covered - hand knitted carpets and leather gloves. But the exporters in Pakistan argued that the two items have no significant volume in the US import and come under no quota or tariff barrier.

Senators Max Baucus and Charles Grassley, the chairman and ranking Republican, respectively, of the Senate Finance Committee, have introduced legislation to extend the GSP benefits at the request of Bush Administration. The sources also pointed out that Senator Brownback, however, on his own introduced a bill that would provide the President with Proclamation authority to reduce or suspend duties on Pakistani textile and apparel products.

In addition, the Administration has adjusted Pakistan's 2001 quotas on several products in order to account for discrepancies between how Pakistan and the US calculated quota-fill rates from 1998-2000. The adjustment, which CITA announced in a Federal Register notice, would add quota in 2001 for about $11 million worth of additional textile and apparel imports.

The Pakistani counterparts have, however, argued that such adjustments were made at their own requests and would have no affect on Pakistani shipments because they were simple adjustments made on papers. The US authorities have reduced some quantities they deducted from three years' quota quantities. There would be no additional export to USA from Pakistan as a result of such adjustments, they claimed.

The textile shipments from Pakistan to USA have seriously disrupted since the US bombing on Afghanistan making the US importers to switch their business to some other less volatile region than Pakistan. The US authorities have, though, made adjustments in some specific categories by borrowing from next year's quotas.

Due to delay in the forthcoming package of trade concessions, it will bring no major change in current situation even if it is announced by the US authorities now because the buying season is already over and we will have to wait until the next season starting in March, said Chairman, Pakistan Readymade Garments Exporters and Manufacturers Association (PRGMEA), Masood Naqi.

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