23rd August, 2006
To: ALL AUTOMOTIVE INDUSTRY EXPORTERS TO THE
UNITED STATES
NAAMSA CHIEF EXECUTIVES
NAAMSA-NAACAM STRATEGIC TASK GROUP
NAAMSA MIDP SPECIALISTS
Ladies and Gentlemen,
ANNUAL REVIEW BY THE OFFICE OF THE UNITED STATES TRADE REPRESENTATIVE (USTR)
OF GENERALIZED SYSTEM OF PREFERENCES (GSP) PRODUCTS ELIGIBILITY: OPPORTUNITY
FOR INTERESTED PARTIES, INCLUDING SA AUTOMOTIVE EXPORTERS, TO COMMENT IN
SUPPORT OF CONTINUED GSP BENEFITS
The United States generalized system of preferences (GSP)
programme which enables exporters from various countries, including South
Africa, to export, duty free, into the United States is subject to an annual
review and interested parties may lobby to have products retained or new
products placed on the GSP list.
In terms of a United States Federal Register Notice on 8th
August, 2006 - the office of the United States Trade Representative
asked for public comment on whether to limit, suspend or withdraw the
eligibility of certain countries classified as upper middle-income economies
which includes, amongst others, South Africa. Apparently the review will
also examine whether to withdraw presidential waivers that give a number of
countries, including South Africa, unlimited duty free access for certain
products.
A copy of the relevant notice is
attached.
Currently, the GSP programme
allows a wide range of products from 133 beneficiary developing countries,
including South Africa, to enter the United States duty free. The United
States imported $26.7 billion (aggregate total imports) under the programme
in 2005—a figure that represents an 18% increase over 2004. Congressional
authorisation of the GSP expires on December 31st 2006. The US
has invited interested parties to comment. Since South Africa is one of
those countries that may loose out as a result of the review,
South African automotive exporters should respond to
the invitation to lodge comments and see this as an opportunity to make a
case as to why, in the case of South Africa, GSP benefits should be retained
– i.e. neither be limited, suspended nor withdrawn.
Potential Withdrawal Of South Africa’s Benefits Under GSP
Whether South African
exporters will be affected negatively as a result of the current review,
will depend on whether South Africa can make a convincing case to remain
beneficiaries. The United States has developed criteria to determine what
countries should be affected. According to United States assessment, South
Africa is one of the thirteen countries whose GSP status could be withdrawn
based on these criteria. However, the United States President has discretion
on this matter and the decision to withdraw the benefits will depend on the
advice he receives.
It has been suggested that
South African stakeholders should submit comments in an effort to ensure
that such advice takes account of South Africa’s views and concerns.
NAAMSA will on behalf of the
South African exporting community, including the Automotive Industry Export
Council coordinate a detailed submission, in this matter, to the USTR office
in the United States.
The following are criteria on
which GSP review and continued eligibility assessment will be made -
Affected countries are those
GSP beneficiary countries for which the total value of the U.S. imports
under GSP exceeded $100 million in 2005, and a) which the World Bank
classified as an upper-middle-income economy in 2005; or b) that accounted
for more than 0.25 of world goods exports in 2005, as reported by the World
Trade Organisation.
Whilst NAAMSA will submit a detailed submission on behalf of the South
African exporting community in support of continued GSP benefits, this does
not preclude individual exporters submitting their own representations. In
this regard, comment should address -
Ř
The likely
economic impact the withdrawal of GSP would have, pointing to the employment
losses, loss of income, etc.
Ř
The likely
adverse economic impact the withdrawal of benefits could have to the US.
Ř
Any other
economic consideration the US President should take into account on this
issue.
These
comments should be submitted to the office of the U.S. Trade Representative
by electronic mail: FR0052@USTR.EOP.GOV no later than Tuesday, 5th
September 2006.
Comment to be submitted as part
of the industry’s submission should please reach NAAMSA/AIEC by not later
than 4th September, 2006.
Regards,
Vermeulen
Note – List of current
automotive products enjoying duty free access into the United States as part
of the GSP programme is attached.
ATTACHMENT TO NAAMSA COMMUNICATION N24 FTA / N24 AIEC –
DATED 23RD AUGUST, 2006
LIST OF SA AUTOMOTIVE PRODUCTS
ENJOYING DUTY FREE ACCESS INTO THE UNITED STATES AS PART OF THE GSP
PROGRAMME
Duty free components under GSP
include -
-
Bumpers and parts
-
body stampings
-
seat belts and airbags
-
door assemblies
-
gearboxes and axles
-
brake linings, mounted
-
brakes and servo brakes and
parts
-
road wheels and parts
-
shock absorbers
-
radiators
-
clutches and parts
-
steering wheels and columns
-
steering boxes
-
suspension parts, shock
absorbers
-
rubber mountings
-
half shafts and drive
shafts
Automotive qualifying products
eligible for duty free access into the United States in terms of the African
Growth and Opportunities Act (AGOA) include-
-
Cars and other passenger
vehicles
-
Light, medium and heavy
commercial vehicles and buses
-
Road tractors for
semi-trailers
-
Chassis fitted with engines
-
Bodies, including cabs
-
Silencers and exhausts
-
Automotive bearings (ball
bearings and tapered roll bearings)
-
Vulcanized rubber belting,
transmission belts, fan belts
-
Steel springs for motor
vehicle suspensions
It is not clear whether the
AGOA benefits form part of the GSP dispensation. NAAMSA understands that
AGOA and GSP benefits, for purposes of the current USTR review, will be
treated as being separate and that therefore the products covered by the
AGOA dispensation are not under threat. NAAMSA will seek confirmation of
this from the United States Embassy, Commercial Section.
NAAMSA OFFICES: PRETORIA
23rd August, 2006
