ITC Releases Report on Possible GSP Additions and Removals Under the 2007 Annual Review

The Harmonized Tariff Schedule (HTS) subheadings being considered for possible addition to the GSP that are covered by the ITC's report are: 2917.12.10 (adipic acid), 4412.39.5030 (certain plywood sheets), 7601.10.30 (certain unwrought aluminum, not alloyed), 7601.20.30 (certain unwrought aluminum, alloys), 7604.21.00 (certain aluminum bars, rods, and profiles), and 8111.00.4910 (manganese metal powder).

The HTS subheadings/country combinations being considered for possible removal from the GSP covered by the ITC's report are: 2931.00.90 from India (certain other organo-inorganic compounds) and 3920.62.00 from Brazil (polyethylene terephthalate (PET) film).

(According to the USTR's petition, the tariff nomenclature in the HTS for the listed subheadings is definitive; any product descriptions are provided for informational purposes only - except in those cases where only part of a subheading is the subject of a petition.)

Public Version Contains Product Details & Import Situation, Not Economic Effect

This report is the public version, and therefore all confidential national security and business information, including the ITC's findings regarding probable economic effect, has been removed. The report does, however, contain detailed product descriptions and uses, profiles of the U.S. industry and market, and the GSP import situation for each product. (The ITC notes that the data in its report covers the period 2002-2006.)

Product Information, Industry & Import Situation for Six Possible GSP Additions

The following are highlights of the product information, industry profiles and import situations for each of the six HTS subheadings being considered for possible addition to the list of articles eligible for duty-free benefits from all GSP beneficiary countries:

HTS 2917.12.10 (adipic acid). Adipic acid is used primarily to make nylon 6,6, which in turn is used in the production of industrial and apparel fabrics, carpets, and engineering resins. Other uses include the production of polyurethane foam, esters for use as plasticizers and synthetic lubricants, food additives, baking powders, and adhesives.

There are currently two U.S. producers of adipic acid, and approximately 80% of domestically produced adipic acid is used captively to manufacture nylon 6,6 fibers and resins with the remainder sold in the merchant market.

Canada, the leading U.S. import source for adipic acid, accounted for more than 70% of adipic acid imports throughout the period (2002-2006); and Brazil was the only GSP-eligible source of imports of adipic acid in 2006.

HTS 4412.39.5030¹ (certain plywood veneered panels). The subject softwood plywood veneered panels are used primarily for structural purposes in residential construction and remodeling as well as in the production of furniture.

Nearly all U.S. consumption is accounted for by domestic production, and imports of the subject products account for a negligible share of the U.S. market.

Canada is the leading U.S. import supplier, followed by Brazil.

HTS 7601.10.30 (certain unwrought aluminum, in coils, not alloyed), HTS 7601.20.30 (certain unwrought aluminum, in coils, alloyed). End-use applications include construction-related uses (architectural and lighting applications), transportation-related uses (passenger cars and commercial trucks and trailers), packaging, and foil.

There are approximately five U.S. manufacturers of the subject coiled aluminum rolled products.

In 2006, there were no U.S. imports from any GSP-eligible countries.

HTS 7604.21.00(hollow profiles, of aluminum alloys). Hollow aluminum alloy shapes are used by customers to manufacture construction related products (primary and secondary doors and windows), commercial and passenger transportation equipment (aircraft, passenger cars, trucks, and trailers), consumer durable goods (furniture and appliances), capital equipment, etc.

There are nearly 150 producers of extruded aluminum hollow shapes in the U.S.

U.S. imports from GSP-eligible countries generally increased during 2002-2006, with Brazil and Colombia accounting for 35% and 31%, respectively, of such imports. However, GSP-eligible countries account for only 4% of total U.S. imports.

HTS 8111.00.4910²(manganese metal powder). In powder form, the principle applications for manganese metal powder are in the production of aluminum alloys which are used for the production of aluminum beverage cans and for the manufacture of welding products.

One U.S. company produces manganese powder from imported flake, primarily from China.

China was the dominant source of U.S. imports from non-GSP-eligible countries, and the only GSP-eligible country that has an industry producing manganese powder is South Africa.

Product Description, Industry, & Import Situation for Two Possible GSP Removals

The following are highlights of the product descriptions, industry profiles and import situations for the two HTS subheading/country combinations being considered for possible removal from the list of articles eligible for duty-free benefits:

HTS 2931.00.90(certain other organo-inorganic compounds - proposed removal for India). Uses for chemicals in this category vary widely and include applications such as pharmaceuticals, heat stabilizers for plastics, pesticides, and marine paints.

In 2006, 75.8% of the total imports for this HTS subheading were imported free of duty under the Pharmaceutical Zero-for-Zero Agreement.

In 2006, India accounted for about 49% of total U.S. imports under this HTS subheading from GSP-eligible countries, with Brazil being the second largest GSP-eligible source.

HTS 3920.62.00(PET) film - proposed removal for Brazil). PET film is suitable for many applications including food packaging, adhesive tapes, and plastic cards of many types (including "smart cards"), electrical motor insulation, wire, cable, capacitors, microfilm, X-ray film, instant films, ink jet photo paper, overhead projector film, audio and video tape, and computer storage media.

Of the eight domestic PET film producers, only four are believed to sell significant volumes into the merchant market;

Brazil was the eighth largest source of U.S. imports of PET film in 2006, and the second largest GSP-eligible source; the value of imports of PET film from Brazil increased from $2.0 million to $13.2 million in the 2002-06 period; however, in 2006 Brazil accounted for less than 4% of total U.S. imports of PET film.

¹This HTS subheading was new breakout as of January 1, 2007.

²According to the USTR's petition, if this addition were to be implemented, a new 8 digit HTS line would have to be created.

(See ITT's Online Archives or 09/17/07 and 12/14/07 news, 07091720 and 07121420, for BP summaries of the ITC's initiation of this investigation and its removal of three HTS subheadings from its investigation, both at the request of the U.S. Trade Representative, respectively.)

ITC contact - Peg O'Laughlin (202) 205-1819

ITC Report, "Advice Concerning Possible Modifications to the U.S. Generalized System of Preferences, 2007 Review of Additions and Removals," (Investigation No. 332-493, dated January 2008) available at http://hotdocs.usitc.gov/docs/pubs/332/pub3982.pdf

ITC press release announcing the report's release (News Release 08-008, dated 01/15/08) available at http://www.usitc.gov/ext_relations/news_release/2008/er0115ff1.htm