ITC Releases Report on Possible GSP Additions and Removals Under the 2008 Annual Review

Public Report Contains Industry and Import Data, 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 uses, profiles of the U.S. industry and market, and GSP import data for each product. (The ITC notes that most of the data in its report covers the period 2003-2007.)

Highlights of U.S. Market and Import Data for Products Being Considered for GSP Additions and Removals

The following are highlights of the U.S. market/import data for 2003-2007 for the thirteen Harmonized Tariff Schedule (HTS) subheadings¹ being considered for possible GSP additions or removals:

Addition of certain veneered plywood panels (HTS 4412.39.5030²). The subject plywood veneered panels are sheets of wood with at least one outer ply of certain softwoods. Demand for softwood plywood panels depends heavily on the construction industry. U.S. imports of the subject products account for a negligible share of the U.S. market. Canada was the leading U.S. import supplier during the 2003-2006 period, but in 2007 and year-to-date 2008, Brazil was the largest supplier. Currently, only imports from countries classified as least developed beneficiary developing countries (LDBDCs) are eligible for duty-free treatment under the GSP. Brazil (the largest GSP-eligible supplier) and Uruguay (the petitioner) are not classified as LDBDCs.

Addition of high density polyethylene (HTS 3901.20.10³). High density polyethylene (HDPE) is a versatile material that is manufactured into downstream plastic products ranging from commercial/consumer applications like plastic shopping bags, milk or laundry detergent bottles, and plastic chairs to industrial applications such as in the production of water and gas pipes and construction barrier film. There are currently 10 U.S. producers of HDPE. GSP-eligible countries accounted for less than 1% of total U.S. imports of HDPE in 2003-2007 and accounted for less than 0.1% in 2007. India, Brazil, and Thailand supplied more than 90% of U.S. imports of HDPE from GSP-eligible countries, in 2003 and 2005-2007. Other GSP-eligible exporters of note included Niger and Russia.

Addition of certain frozen vegetables (HTS 0710.10.00, HTS 0710.30.00, HTS 0710.40.00, HTS 0710.80.9722, HTS 0710.80.9724, and HTS 0710.80.9726). The subject frozen vegetables (potatoes, spinach, sweet corn and broccoli, respectively) are all uncooked or cooked by steaming or boiling in water. The U.S. is a major producer of all the subject frozen vegetables, most of which are grown specifically for processing. The U.S. is not a major importer of potatoes, spinach, or sweet corn, but is a major importer of broccoli. Ecuador, the largest volume GSP-eligible supplier in recent years, accounted for 11% of total U.S. frozen broccoli imports and essentially all GSP-eligible frozen broccoli imports in 2007.

Addition of certain fruit mixtures (HTS 2008.92.9040). The subject products are mixtures of fruit containing oranges or grapefruit packed in a liquid medium in airtight containers. Industry sources quoted in ITC's report state that there is no known commercial production of such canned fruit mixtures in the U.S. and that U.S. consumption of these canned fruit mixtures is believed to be entirely accounted for by imports. Of the GSP-eligible exporters, Swaziland accounted for 3.4% of the total value of U.S. imports of the subject canned fruit and 95.7% of total GSP-eligible imports in 2007, while imports from Thailand (the second leading GSP-eligible supplier) have trended irregularly downward.

Addition of certain pineapple juice (HTS 2009.41.20, HTS 2009.49.20). Currently, U.S. production of the subject not concentrated (i.e., single-strength) pineapple juice is negligible, with Maui Pineapple Company of Hawaii being the last significant producer. Two large volume importer/processors account for most imports and sell principally brand-name labeled products. GSP-eligible countries together account for nearly all U.S. imports of the subject products. The Philippines accounted for 87% of total single-strength pineapple juice imports, 88% of total GSP-eligible imports, and 84% of total U.S. consumption in 2007. The share of imports accounted for by Thailand remained at about 6% during the 2003-2007 period.

Removal of PET resin for India and Indonesia (HTS 3907.60.00). Converters use bottle-grade PET resin to manufacture bottles and other sterile containers that house liquid and solid products for human consumption or contact such as carbonated soft drink bottles, water bottles, and other containers for juices, peanut butter, jams and jellies, salad dressings, cooking oils, household cleaners, and cosmetics. The U.S. PET resin industry consists principally of seven large producers with facilities in the U.S., Canada, and Mexico, many of which have consolidated operations in recent years. Indonesia and India are the primary GSP suppliers of imported PET resin to the U.S. market, together accounting for about 80% of GSP imports and 13% of total U.S. imports.

Removal of nylon 6 for Thailand (HTS 3908.10.00). Nylon-6 is sold primarily in three market segments-fibers (carpeting, rugs, etc.), engineering plastics (primarily for automotive use), and film (food packaging). U.S. shipments and consumption of the subject product increased during the 2003-2007 period, though specifics on the U.S. nylon 6 industry were not made available. Thailand accounts for 0.4% of total U.S. imports of the subject product and 7% of U.S. imports from GSP-eligible countries. U.S. imports from Thailand more than doubled during the 2003-2007 period. Brazil was the leading source of U.S. imports from GSP-eligible countries during the 2003-2007 period.

¹According to the USTR, the tariff nomenclature in the HTS for the listed subheadings is definitive; the product descriptions in the USTR's request and the ITC report are provided for informational purposes only, except in those cases where only part of a subheading is the subject of a petition.

²This HTS subheading was a new breakout as of January 1, 2007.

³In 2004, HTS subheading 3901.20.00 was split into two HTS subheadings - 3901.20.10 and 3901.20.50, based on specific gravity and viscosity. HTS subheading 3901.20.50 is currently eligible for duty-free GSP treatment.

(See ITT's Online Archives or 10/08/08 news, 08100820, for BP summary of the ITC's initiation of this investigation.)

ITC press release (dated 01/15/09) available at http://www.usitc.gov/ext_relations/news_release/2009/er0115gg1.htm

ITC report, "Advice Concerning Possible Modifications to the U.S. Generalized System of Preferences, 2008 Review of Additions and Removals" (Investigation No. 332-500, dated January 2009) available athttp://hotdocs.usitc.gov/docs/pubs/332/pub4057.pdf