ITC Issues Report in Investigation on Waiving GSP CNLs for Three Country/HTS Combos

Each country had petitioned the U.S. Trade Representative (USTR) for a CNL waiver, and the USTR had requested that the ITC provide possible economic effect advice on the matter.

ITC Provides Advice for Certain Country/Tariff Number Combinations

The three country/Harmonized Tariff Schedule (HTS) tariff number combinations are:

(The USTR's original request to the ITC for this report states that 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 in which only part of a subheading is the subject of a petition.)

Combinations Could Lose GSP Benefit if CNL Exceeded and Waiver Not Granted

The three country/tariff number combinations are all currently eligible for GSP duty-free benefits, but could lose their benefits on July 1, 2008 if a CNL was exceeded in 2007 and a waiver is not granted by the President.

(The USTR has previously explained that the President has the authority to waive both the value and 50% CNLs¹ for a country/tariff number combination, if an interested party petitions for a waiver before the country/tariff number combination exceeds a CNL.

The President can also consider a de minimis waiver for all GSP countries that exceed the 50% CNL for a tariff number, if the value of imports of that tariff number from all countries during the calendar year did not exceed the applicable de minimis amount for the year ($18.5 million for 2007). No petition is required to be filed for a de minimis waiver. Note that the USTR has previously indicated that HTS 2001.10.00 from India and HTS 7413.00.50 from Turkey are not eligible for a de minimis waiver.)

Public Version of Report Does Not Contain 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 2003-2007.)

Industry Profile, Import Situation of Products Being Considered for CNL Waivers

The following are highlights of the product information, industry profiles and import situations for each of the country/HTS tariff number combinations being considered for possible CNL waivers.

HTS 2001.10.00 (cucumbers from India). The products covered in this subheading are cucumbers, including gherkins, which are generally referred to as pickles and are prepared or preserved by vinegar or acetic acid, usually in cans or jars.

The U.S. is a leading global producer of pickles; India is a small- to medium-sized pickle producer, with estimated production quantities of about 1/10^th that of the U.S.

However, India was the largest global supplier of cucumbers (including gherkins) to the U.S. market in 2007, accounting for 55% of total imports and 93% of GSP-eligible imports.

HTS 4011.10.10 (radial car tires from Indonesia). Radial tires (in which the tire cord runs archwise from bead to bead) account for more than 93% of original equipment passenger car tires and close to 100% of replacement passenger car tires in the U.S. market.

The U.S. industry producing radial motor car tires consists principally of three large producers and seven smaller producers.

In 2007, Indonesia accounted for 3% of total U.S. imports, 38% of total GSP-eligible imports, and 1% of domestic consumption.

HTS 7413.00.50 (copper cable from Turkey). Copper cable is composed of one or more wires bound or stranded together, typically inside a protective sheath. The cable inside the sheath is typically insulated.

The growth in U.S. copper cable consumption during 2003-2007 is mainly attributable to growth in demand in building applications, where copper cable accounts for over 90% of the building wire and cable market.

Turkey is the leading U.S. supplier of these products from GSP-eligible countries, and China and South Korea are Turkey's principal competitors in supplying copper cable to the U.S. market.

¹There are two types of CNLs - the value CNL (which is $130 million for 2007) and the 50% CNL (equal to or greater than 50% of the value of total U.S. imports of the tariff number from all countries). Country/tariff number combinations that exceed one or both CNLs, based on full calendar year 2007 import statistics, will lose GSP duty-free treatment on July 1, 2008, unless a waiver is granted by the President.

(See ITT's Online Archives or 04/01/08 news, 08040110, for BP summary of the ITC's termination of this investigation for two CNL waiver petitions.

See ITT's Online Archives or 03/10/08 and 03/17/08 news, 08031005 and (08031705), for BP summary and reminder of the USTR's lists of the country/tariff number pairs that may lose or gain GSP eligibility on July 1, 2008.

See ITT's Online Archives or 01/31/08 news, 08013110, for BP summary of the USTR's announcement of five CNL waiver petitions accepted for 2007 GSP annual review.

See ITT's Online Archives or 02/07/08 news, 08020750, for BP summary of the ITC's initiation of this investigation.)

ITC report, "Advice Concerning Possible Modifications to the U.S. Generalized System of Preferences, 2007 Review of Competitive Need Limit Waivers" (Investigation No. 332-497, dated April 2008) available at http://www.usitc.gov/publications/pub3995.pdf