Issue 324, October 4, 2001
The events of the past few weeks are bringing many changes to the international trade scene. On September 30th, the Generalized System of Preferences (GSP) lapsed, hopefully to be revived shortly. However, several recent changes can provide new advantageous sources to lower your product costs.

Over the past year, there has been significant investment in Africa ($4 billion in trade and investment in the region), as well as the Caribbean, in response to the duty benefits provide by the African Growth and Opportunity Act and the Caribbean Basin Trade Partnership Act.

The United States recently ratified a Free Trade Agreement (FTA) with Jordan. The agreement will eliminate duties on virtually all trade between the U.S. and Jordan within a period of 10 years. (It is significant to note that the benefits available under the FTA differ from those currently afforded to merchandise processed in a Jordanian Qualifying Industrial Zone (QIZ), e.g.: Irbid, which is immediately duty and quota free.) The negotiated tariff reductions will be implemented in four concurrent stages. Tariffs which are currently under 5% will be phased out over two years. Those tariffs which are currently greater than 5%, but less than 10%, will be phased out over four years. Current tariffs between 10% and 20% will be phased out over the course of five years. Finally, tariffs which are currently 20% or higher will be phased out over a period of ten years. All tariffs will be removed in equal annual stages within their respective phaseout period (e.g., a current 10% tariff will be reduced by 2% per year for 5 years).

The House and Senate have ratified the Vietnam Bilateral Trade Agreement. The agreement is nearly the last hurdle in granting of Normal Trade Relations (NTR) status to Vietnam. The agreement will enter into force on the date the U.S. and Vietnam exchange written notifications of their implementation of the agreement. This is anticipated to occur in the next few weeks. This change will lower duty rates on Vietnamese goods, in some cases as much as 75% or more. Vietnam, with a efficient workforce, is likely to prove to be a new significant supply source in the future.

Finally, after more than eight years, it appears that in the next few weeks, Congress will give the President "Trade Promotion Authority" (TPA). Also known as "Fast Track," the new authorization clears the way for a new international round of negations due to kick off in Doha, Qatar in November. Perhaps more importantly, this authority will likely open the doors to finalize the "Free Trade of the Americas", initiated in the 1994 Summit of the Americas. The FTAA is intended to open trade and integrate the economies of North, Central and South America into a single free trade arrangement.

Our contributing writer, David M. Murphy, is with the Customs and international trade law firm of Grunfeld, Desiderio, Lebowitz, Silverman & Klestandt LLP in New York City and can be reached via dmurphy@gdlsk.com at 212-557-4000 .

Please note that due to the complex nature of the subject matter, Danzas AEI Intercontinental cannot be responsible for actions taken by the reader in reliance on the information contained herein without prior consultation with Danzas AEI Intercontinental.