US House bill cuts Brazil, India trade benefits

Washington, Sept 23: A Republican bill to extend trade benefits for developing countries would knock key industries in Brazil and India out of the programme, development groups said today.

Oxfam America said it welcomed the bill introduced in the House of Representatives yesterday by Ways and Means Committee Chairman Bill Thomas, a California Republican, but called for number of changes to be made.

''The exclusion of some developing countries from the GSP (Generalized System of Preferences) programme is troubling, given the millions of poor people who are employed in sectors that directly benefit from duty-free benefits,'' Raymond Offenheiser, president of Oxfam America, said in a statement.

Kevin Madden, a spokesman for House Majority Leader John Boehner, said Republicans hoped to move the bill next week on the ''suspension calendar,'' which is reserved for noncontroversial legislation but requires a two-thirds vote for approval.

Democrats said they were still evaluating the bill, which differs greatly from their own trade benefits legislation.

The United States' main trade benefits program for developing countries -- the Generalized System of Preferences -- expires on December 31, as does a separate program for the Andean countries of Colombia, Peru, Ecuador and Bolivia.

The Bush administration favors renewing GSP, but is in the midst of a review that could kick many large developing countries like Brazil and India out of the program.

Many lawmakers, such as Senate Finance Committee Chairman Charles Grassley, an Iowa Republican, no longer want to provide duty-free treatment to products from major developing countries that are resisting US pressure in world trade talks to open their own markets to more US exports.

The bill would exclude India's jewelry sector from the programme by barring duty-free treatment for any product from a developing country that has annual export sales of more than 1.5 billion dollars, said Viji Rangaswami, an associate at the Carnegie Endowment for International Peace.

Another provision aimed at developing countries with a per capita income of more than 3,400 dollars would deny duty-free access for Brazil's auto parts exports and other Brazilian sectors, Rangaswami said.

The bill would not extend trade benefits for Andean countries. Peru and Colombia have negotiated free-trade pacts that lock in their duty-free access to the United States, but Bolivia and Ecuador have not.

REUTERS