ERJ staff report (RPN)
By Rubber & Plastics News Staff
Washington, DC -- President Obama's 26 Oct signing into law a renewal of the US Generalized System of Preferences will allow duty-free treatment for tyres and other rubber products made in South Korea, Panama, and Colombia.
The renewed laws will greatly increase the US tyre trade, especially with South Korea, the Tire Industry Association said in a press release.
â€œThe renewal of the (South Korean) programme removes 95 percent of the existing tariffs within five years for goods and services covered by the pact,â€ said Roy Littlefield, TIA executive vice president, in a press release. â€œThe agreement also provides greater access to the Korean government procurement market for American companies.â€
The South Korean FTA gradually reduces the tariff on imported South Korean passenger and truck radial tyres from the current 4 percent to 0 percent by the fifth year of the agreement, TIA said. The duty-free importing of tyres from South Korea will then last for another 15 years until the agreement comes up for renewal.
For US tyre manufacturers, South Korean import duties will go from the current 8 percent to 0 percent, TIA said.
The South Korean agreement will particularly help US consumers hurt by the price hike on tyres in late 2009 caused by the Section 421 tariffs on Chinese-made passenger and light truck tyres, according to TIA. In the wake of these tariffs, South Korean tyre imports to the US increased 63 percent, it said.
Both the GSP and the South Korean FTA lapsed on 31 Dec 2010.
Renewal of GSP and the free trade agreements were criticised by the United Steelworkers union, which said they will endanger US workers.
â€œHistorically, these agreements have closed American manufacturing facilities and cost American jobs,â€ said USW International President Leo Gerard. â€œIt is foolish to think that this latest round will do something different.â€
The USW successfully petitioned the Obama administration for the Section 421 tariffs on Chinese tires in 2009. It also later successfully fought to remove duty-free GSP status on tyres imported from Thailand.
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Article from Rubber & Plastics News