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USTR launches review of Thailand’s GSP Trade Benefits

The Office of the U.S. Trade Representative accepts a petition from NPPC challenging Thailand’s eligibility for the Generalized System of Preferences trade preference program.

Source: National Pork Producers Council and U.S. Trade Representative

The Office of the U.S. Trade Representative has agreed with a request from the National Pork Producers Council to review Thailand’s eligibility for the U.S. Generalized System of Preferences (GSP) program because of that country’s failure to provide access to its market for U.S. products, including pork.

“GSP eligibility criteria are a core element to the success and fairness of the program,” said Deputy U.S. Trade Representative Jeffrey Gerrish. “Congress directs USTR to ensure that beneficiary countries are permitting equitable and reasonable market access for American goods. The petition from the National Pork Producers Council raises important questions regarding Thailand’s compliance with this criterion for GSP eligibility.”

NPPC, which last month filed a GSP review petition with USTR, is urging the Trump administration to withdraw or limit the benefits Thailand receives under the preferential trade program, which gives duty-free treatment to certain goods entering the United States. The program allows for removal of a country’s benefits if it fails to provide the United States “equitable and reasonable access” to its market.

“Thailand for years has willfully denied equitable access to our products,” said NPPC President Jim Heimerl, a pork producer from Johnstown, Ohio. “We’re pleased that USTR is going to look into the unfair treatment U.S. goods are getting from Thailand.”

USTR’s acceptance of the NPPC petition will result in a public review of Thailand’s GSP eligibility, including a public hearing and comment period. Details on the review will be announced in an upcoming Federal Register notice.

Despite the United States is Thailand’s No. 1 export market, with almost $4 billion of products annually sent to America under the GSP, the southeast Asian nation has a de facto ban on U.S. pork imports through high tariffs and several non-tariffs barriers.

Its 2015 average applied Most Favored Nation tariff rate on agricultural imports was nearly 31% – its average MFN rate on non-agricultural products was 7.7%– and its ad valorem tariffs were as high as 337%. Most of the highest rates apply to agricultural imports that compete with domestic goods, including beef, pork and poultry.

Among its non-tariff restrictions, Thailand does not accept uncooked pork and pork offal from the United States, and it rarely, if ever, grants import licenses for U.S. pork. Even if such permits are granted, Thailand imposes a fee for imported pork currently equal to about $220 per metric ton compared with $7.50 per metric ton for domestically produced pork.

The restrictions have severely limited U.S. pork exports to Thailand. In 2017, for example, the United States shipped just 31 metric tons of pork to Thailand’s 69 million people, who annually eat about 726,000 metric tons. (The United States sent more pork to Tonga’s 107,000 people.)

“Thailand’s treatment of U.S. pork provides a clear basis for removing or limiting its GSP benefits,” Heimerl said. “We hope the administration will take action as a way to convince that country to rescind its current import restrictions on U.S. pork and other products.”

For more information on the GSP program, visit the GSP page on the USTR website here.

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