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U.S. House Ways and Means Committee Chairman Bill Thomas Offers African & Haitian Trade Legislation Bill

Thursday September 21st, 2006 / 2h24

By John Godfrey

OF DOW JONES NEWSWIRES

WASHINGTON -(Dow Jones)- U.S. House Ways and Means Committee Chairman Bill Thomas, R-Calif., introduced Thursday evening legislation that would extend the life of a number of expiring trade incentives for developing countries including African nations and Haiti.

The bill could come to the House floor as early as next week. It would have to pass the Senate before it could be signed into law.

Specifically, the bill would extend for two years the U.S.'s generalized system of preferences. The U.S. generalized system of preferences program is designed to promote economic growth in the developing world. It provides preferential duty free entry for more that 4,650 products from 144 countries and territories, according to the U.S. Trade Representative's office.

The bill would also extend the African Investment Incentive Act and the Haitian Hemispheric Opportunity through Partnership Encouragement Act, also known as the HOPE Act.

"This legislation is aimed at continuing and targeting our bipartisan humanitarian efforts through trade," Thomas said. "It will enhance opportunities for the world's poorest countries, while assuring no adverse impact to U.S. industries or workers."

The legislation won't extend the life of a package of trade incentives for Peru, Ecuador, Bolivia and other Andean nations.

Ways and Means Democrat Charles Rangel, D-N.Y., had proposed a plan that would have extended the life of the so-called Andean Trade Preferences, but Thomas said he was more interested in seeing bilateral free trade agreements negotiated with those countries, than an extension of the old trade preferences.

"I am not interested in used goods, I am interested in new product," Thomas said Thursday afternoon.

Thomas has also modified the programs he does intend to extend the lives of.

For example, GSP benefits would be extended only to countries with a per capita income below $3,400, apparently excluding nations such as Venezuela, Malaysia, Gabon, and Trinidad and Tobago.

Likewise, those benefits wouldn't be available to any product category for which the value of that country's exports exceed $1.5 billion in a year, hitting, for example, jewelry exports from India.

Thomas has also proposed modifying the African Investment Incentive Act to replace the current third country fabric benefit with a new rule based upon the percentage of African content. The new rule, to take effect in 2008, would allow duty free access into the U.S. for apparel containing 50% or more African content, according to a description of the bill provided by the House Ways and Means Committee. The 50% in the rule would grow to 60% in increments through 2015

-By John Godfrey, Dow Jones Newswires; 202-862-6601; John.Godfrey@dowjones.com