USA raises new rules to approve the GSP

Ecuadornews:

Ecuador has the guarantee that this year it will be able to continue benefiting from the GSP that the United States gives, but not the certainty of the time that it will be able to enjoy this benefit.

According to EXPRESO, the draft Law on the Renewal of the Generalized System of Preferences (GSP) proposes a three-year concession, but also the need for this aid to be subject to an annual review.

For businessmen, the internal commercial regulations adopted by Ecuador would discourage future renewal. The content of this law alerts once again the business sector that considers that, under this condition, Ecuador can at any time be left out of this program that today allows nearly 400 non-oil products to enter the US market at zero tariff.

In this evaluation, the US would verify if the 122 countries that access this benefit meet the conditions to obtain the GSP, including adopting regulations that help eliminate trade barriers, a factor that according to Francisco Briones, director of Studies of the Chamber of Commerce of Guayaquil (CCG), generates risks for the country.

In our case, he says, issues such as “the recent illegal imposition of the customs control service fee or the unilateral elimination of bilateral investment treaties  will surely be points of contention”. It is still necessary to know the parameters that the authorities would use for this evaluation, but Nancy Celi, foreign trade analyst, reminds that this type of practice is not new for the North American administration.

Constantly, says, US It is customary to review the amount of exports that are covered under this benefit. “There are products that have up to a ceiling to grow and that is why it is forced to do that analysis.” In the case of Ecuador, he explains, this year he must present his justifications regarding the shipment of taro, since an increase in his exports could leave this product without the GSP.

“We are practically the only ones that export malanga to the US, then when a country exceeds 50% of the offer there is a risk. Last year the Embassy already justified that increase and approved it, but this year we have to do it again, “he says.

But it is not the only change. Briones mentions that the project, which is scheduled to be approved this week in the US Congress, also includes another condition for granting the GSP: items that have been produced locally in the US are excluded from this benefit, during the last three years.

If so, Francisco Ballén, former Vice Minister of Foreign Trade and adviser to Corpei, mentions that this exclusion clause would not affect the main Ecuadorian primary products that enter that market to be processed, since shrimp, bananas, coffee and Cocoa enters the country of the North with a tariff of 0%, but under the Most Favored Nation (MFN) program. “Thus, there is no danger for Ecuador due to the existence of captive shrimp production in the Gulf of the USA” However, he notes, this would be a limitation for the canned tuna industry (can and pouch) that enters that country under the Generalized System of Preferences.

The lack of a commercial agreement with the United States, says Briones, makes Ecuador obliged to take care of its status as a deserving country and to accelerate the process to obtain a long-term agreement. If this is not done, this preference could end and cause Ecuadorian production in the North American market to become more expensive and loose advantage over the products of its main competitors. (I)

Source: http://www.expreso.ec/economia/comercio-aranceles-sgp-ecuador-eeuu-EJ2029446