ITC Reports on Effects of Waiving CNL for Tires from Thailand under GSP

ITC Provides Advice on Granting CNL Waiver for Tires from Thailand

As requested, the ITC provided advice as to the impact of granting a CNL waiver for:

CNLs represent the maximum import level of a product that 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. There are two types of CNLs -- the value CNL (which is $140 million for 2009) and the 50% CNL (equal to or greater than 50% of the 2009 value of total U.S. imports of the tariff number from all countries). If the CNL is exceeded and a waiver is not granted, subject tires could lose GSP benefits on July 1, 2010.

Public Version Contains Industry and Market Data, Not Economic Effect

As this ITC report is the public version, all confidential national security and business information, including the ITC’s findings regarding probable economic effect, has been removed. The report does, however, contain U.S. industry and market data for the radial motorcar tires.

Highlights of U.S. Industry and Market Data for Radial Motorcar Tires

The following are highlights of the U.S. industry and market data for 2005 -- 2009 for the radial motorcar tires being considered for a CNL waiver:

Imports increased from 2005 -- 2008, declined in 2009. The value of radial passenger car tire imports increased from 2005--2008 before declining in 2009, and import quantities followed a similar trend. The diverging trends in production and imports caused the import share of the U.S. market to increase over most of the period, before retreating slightly in 2009.

China, Japan, Canada, Korea primary suppliers. China, Japan, Canada, and Korea were the primary suppliers of subject tire imports to the U.S. market in 2009, together accounting for more than 52% of imports. Total import value of the subject tires increased by 20% from 2005 - 2009, with China accounting for most of the increase.

Thailand, Indonesia top GSP-eligible suppliers. U.S. imports of radial motorcar tires from GSP-eligible countries accounted for 4% of U.S. consumption in 2009 and 9% of total U.S. imports in 2009. Indonesia and Thailand were the primary GSP-eligible suppliers.

In 2009, Thailand accounted for 4% of total U.S. imports, 40% of total GSP-eligible imports, and 1% of domestic consumption. The value of U.S. imports from Thailand increased significantly from $18.1 million in 2005 to $154.8 million in 2009.

U.S. exports fell by quantity. Whereas the value of U.S. exports increased during 2005 -- 2008 before declining slightly in 2009, export quantities generally fell throughout the period, with the exception of a small increase in 2008.

10 U.S. producers. The U.S. industry producing radial passenger car tires consists of three large multinational producers and seven smaller producers.

(See ITT’s Online Archives or 01/14/10 news, (Ref: 10011415), for BP summary announcing the ITC initiating this investigation.)

ITC press release (dated 04/21/10) available at http://www.usitc.gov/press_room/news_release/2010/er0421hh2.htm

ITC Investigation “Advice Concerning Possible Modifications to the U.S. Generalized System of Preferences, 2009 Review of a Competitive Need Limit Waiver” (Inv. No. 332-512, dated April 2010) available at http://www.usitc.gov/publications/332/pub4140.pdf