Saturday, August 19, 2006

The US has agreed to open up 97% of its markets to the poorest of countries. The catch is that it gets to chosethe 3% it wants to refuse

The situation is no better if the 3% rule applies to the tariff lines that the US imports from the rest of the world (rather than to the lines individual poor countries export to the US), for then the US can exclude roughly 300 tariff lines from duty-free and quota-free treatment. For Bangladesh, this implies that 75% of the tariff lines, accounting for more than 90% of the value of its exports to the US, could be excluded from duty-free treatment. Exclusion from duty-free treatment could reach 100% for Cambodia, which exported only 277 tariff lines to the US in 2004.

The official argument for the 3% exclusion is that it affects “sensitive products.” In other words, while the US lectures developing countries on the need to face the pain of rapid adjustment to liberalization, it refuses to do the same. (Indeed, it has already had more than 11 years to adjust to liberalization of textiles). But the real problem is far worse, because the 3% exclusion raises the spectre of an odious policy of divide and conquer, as developing countries are invited to vie with each other to make sure that America does not exclude their vital products under the 3%.
Th e whole exclusion simply undermines the multilateral trading system.

For Complete Article, Click on IIPM Article

Source :- IIPM Editorial, 2006, Editor - Prof. Arindam Chaudhuri

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