ITC Issues Report in Investigation on Waiving 2008 GSP CNLs for Certain PET Resin, Leather and Wire

(CNLs represent the maximum import level of a product, in terms of the dollar value or share of total imports, which is eligible for duty-free treatment under the GSP. Once the limit is reached, trade is considered "competitive," benefits are no longer needed, and imports of the article become ineligible for GSP treatment, unless a waiver is granted.

In accordance with the GSP statute, the dollar-value limit is increased by $5 million annually; the limit was $135 million in 2008, and will be $140 million in 2009.)

ITC Provides Advice for Three Country/Tariff Number Combinations

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

The Three Combinations Will Lose GSP Benefit if Waiver Not Granted

The three country/tariff number combinations have already exceeded the 2008 CNLs, and are slated to lose their benefits on July 1, 2009 if a waiver is not granted by the President.

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 2004-2008.)

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 3907.60.00 (PET resin from Indonesia). PET resin is a large-volume, commodity-grade, thermoplastic polyester resin produced from purified terephthalic acid (PTA) and monoethylene glycol. It is primarily sold in bulk form as chips or pellets to downstream end users and converters that produce PET products for a wide variety of applications.

Canada, Mexico, and Indonesia are the leading suppliers of imported PET resin into the U.S. market (together representing about 69% of total U.S. imports in 2008), and benefit from the duty-free provisions of NAFTA (Canada and Mexico) and the GSP (Indonesia).

Indonesia and India are currently the primary GSP suppliers of imported PET resin to the U.S. market, with Indonesia accounting for about 65% of the GSP total, and India, 1%. Indonesia was the third leading supplier of total U.S. imports of PET resin, accounting for about 16% in 2008; imports from all GSP-eligible countries accounted for 24 percent of total U.S. imports

HTS 4107.91.80 (certain leather from Argentina). Certain leather under this HTS subheading is one of a variety of leather products produced from the hides of bovine (other than buffalo) and equine animals. Such leather is further prepared after tanning; it does not include whole hides or grain splits.

The U.S. is a major producer and exporter of hides and leather, but certain leather, which is the subject of the waiver request, accounts for a small share of leather and hides produced in the U.S.

Imports of the subject leather from Argentina accounted for 3% of all U.S. leather imports in 2008. Argentina is the primary import source of the subject leather to the U.S. market.

HTS 7413.00.10 (stranded copper wire from Turkey). Stranded copper wire is composed of small-gauge wire bundled to make a larger conductor. Stranded copper wire conductors are commonly used in electronic applications to carry small signals (e.g., computer mouse cables) and in electrical applications to distribute electricity (e.g., power cables between a movable appliance and its power source).

The number of U.S. producers of stranded copper wire remained constant during the 2004-2008 period, and the estimated value of U.S. shipments fluctuated before ending the period with a decrease of 1%.

In 2008, Turkey was the leading supplier of total U.S. imports (60%), as well as the leading GSP supplier (93%). The value of imports from Turkey increased by 198% from 2007 to 2008.

(See ITT's Online Archives or 03/23/09 news, 09032330, for BP summary of the ITC's termination of this investigation for three CNL waiver petitions.

See ITT's Online Archives or 03/06/09 and 03/18/09 news, 09030610 and 09031820, 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, 2009 including the three combinations listed above.

See ITT's Online Archives or 01/28/09 news, 09012815, for BP summary of the USTR's announcement of six CNL waiver petitions accepted for 2008 GSP annual review.

See ITT's Online Archives or 02/03/09 news, 09020315, for BP summary of the ITC's initiation of this investigation.)

ITC press release (No. 09-035, dated 04/29/09) available at http://www.usitc.gov/ext_relations/news_release/2009/er0429gg2.htm

ITC report, "Advice Concerning Possible Modifications to the U.S. Generalized System of Preferences, 2008 Review of Competitive Need Limit Waivers" (Investigation No. 332-506, dated April 2009) available at http://www.usitc.gov/publications/332/pub4074.pdf