Sallie James of Cato has a good piece on the U.S. GSP program. Here are some snippets.
The opening salvo:
To the extent that preference recipients jealously guard their special access and resist global efforts to liberalize trade on a nondiscriminatory basis, unilateral preference programs can be counterproductive to achieving a more liberal global trade regime and a more stable and permanent path to economic growth.
Some aspects of current programs may not be consistent with WTO obligations:
The degree to which preference-granting countries abide by the principles of a generalized system of preferences as originally envisaged by the UNCTAD declaration—especially with respect to conditionality and nonreciprocity—is a point of contention. Certainly the United States GSP program has some questionable gaps and limitations in that regard.
The inability of current programs to help the poorest of the poor:
most of the top sources of GSP imports are relatively fast-growing and among the “richer” developing countries, with the exception of Angola and Equatorial Guinea, prominent because as LDC beneficiaries they get duty-free access for their oil exports.
The influence of special interests:
This year, although the president denied the petition to remove certain sleeping bags from the list of GSP-eligible products, Rep. Robert Aderholt (R-AL) has since introduced the Save U.S. Manufacturing and Jobs Act (H.R. 5940) to remove them from the list by legislative means, on the grounds that sleeping bags should be considered textile goods (not included in GSP). Representative Aderholt’s congressional district is, coincidentally, home to a sleeping bag manufacturing company called Exxel Outdoors Inc.
The complex interaction of different trade laws:
eligible countries are still vulnerable to traps set by other U.S. trade barriers. A recent example is passenger tires from Thailand. When the U.S. International Trade Commission ruled in September 2009 that Chinese passenger tires were harming the interests of U.S. tire producers, President Obama imposed tariffs of 35 percent on Chinese tires. U.S. tire importers started sourcing their tires from other countries, including Thailand, instead. As a result of the increase in imports of tires from Thailand, the CNL was breached and Thailand lost its GSP access for its tires, which now face the MFN rate of 4 percent.
And finally:
Ideally, the United States, as the world’s largest economy and a global proponent of open markets and globalization, should open its markets to all goods from all countries on a permanent, nondiscriminatory basis.
I'm guessing she had trouble holding in a smile when she wrote that last bit!
