ETHIO-TRADE

Don’t miss the opportunity to export to the United States- Duty-free share of imports from:

Imports

 European Union66%

“Preference” beneficiaries 64%

China 57%

Pakistan 12%

* 139 low-to-middle-income countries and territories in Africa, Latin America, Caribbean, Asia, Middle East and Pacific.

WHAT THEY MEAN:

 Reviewing America’s six “trade preference” programs yesterday at the Senate Finance Committee, the DLC’s Ed Gresser graded them “A” for intent and “B” for performance The preferences waive some, and sometimes most, tariffs on goods from 139 developing countries and territories around the world, with especially favorable treatment for African countries and Haiti. Last year they covered $21 billion in poor-country imports (excluding oil, or $62 billion counting oil) — about 1.6 percent of America’s total non-oil imports and 15 percent of imports from the preference countries.

 In practice, the preferences’ overall effect is to even out the American trade regime rather than give poor countries better treatment than rich. This is because on its own, the American tariff system is tougher on poor countries (or more specifically, on poor countries without natural resources). Comparing the $240 billion in goods bought from preference countries with treatment of the roughly comparable value of Canadian, European, and Chinese goods finds the following:

Canada: 97 percent duty-free. About $8 billion of last year’s $225 billion in Canadian merchandise seem to have got tariffs, mainly from anti-dumping cases and lumber disputes. The rest were duty free under the permanent tariff system — natural gas, books, aluminum, planes, paper — or through NAFTA. Canadians, meanwhile, imported about $205 billion in American goods. 

European Union: 66 percent duty-free. Americans bought $281 billion in EU goods last year (and about $160 billion in services, which get no tariffs). About $183 billion of this arrived duty free, including planes, artwork, beer, military gear, smoked salmon, computers, satellites, perfumes, etc. The $95 billion in tariffed European goods range from cars to fashion clothing and accessories, jewelry, wine and power equipment. EU members imported $220 billion in American goods. 

Preference countries: 64 percent duty-free. Preference beneficiaries supplied $240 billion in goods, with $90 billion permanently duty free and another $62 billion under preferences. Diamonds, shrimp, rubber, telephones, wood, etc. are permanently duty free; preferences excuse Colombian flowers, Turkish stonework, Thai silver jewelry, Brazilian auto parts, Venezuelan and Nigerian crude oil, South African cars, Kenyan clothes and so on. Indonesian shoes, Pakistani towels, Cambodian pajamas, Brazilian power gear and Bangladeshi shirts, among much else, remain subject to tariffs. The preference countries bought $150 billion in American goods last year, including about a sixth of manufacturing and agricultural exports. 

China: 57 percent duty-free. China, surpassing Canada as the largest single exporter to the United States last year, sent over $296 billion in goods (and a likely $10 billion in services). Of this total, $168 billion was duty free: major examples include cameras, toys, PCs, furniture and telephones. Tariffed goods included $128 billion in clothes, shoes, TV sets, DVD players, luggage, lamps, small appliances and so forth. China bought $70 billion in American goods last year, with Hong Kong and Macao adding another $20 billion. 

The mix of permanent tariffs and preference waivers thus leaves lower-income countries, on average, treated slightly more easily than Chinese goods and a bit less favorably than EU products. Their main gap is in treatment of low-income Asia and some big Muslim states. Lacking large natural-resource endowments, these countries rely on exports of clothes, home linens and a few other light manufactures, where preference programs waive tariffs for most African and Latin American countries but keep them in force for low-income Asia. Thus only 12 percent of Pakistani imports — mainly towels, sheets and pillowcases, clothes and luggage — are duty free, along with 8 percent of Laos’ goods, 4 percent of Bangladeshi products, and 1 percent of Cambodia’s pajamas and shirts.