ARLINGTON, VA — On June 19, the Office of the U.S. Trade Representative (USTR) Subcommittee on the Generalized System of Preferences (GSP) held a public hearing on its review of the eligibility of several countries, including India, Indonesia and Thailand, for benefits under the GSP program. GSP provides duty-free treatment to goods of designated beneficiary countries and has a significant, positive impact on the chemical distribution industry and the American economy as a whole. Expressing concern about the impact of the removal of GSP benefits from these countries, National Association of Chemical Distributors (NACD) President Eric R. Byer made the following statement:

“Removing India, Indonesia and Thailand as designated countries under the GSP would have harmful consequences for the chemical distribution industry. Many NACD members import chemicals from these countries and depend on the GSP program for cost efficiency of those imports. They have longstanding relationships with suppliers in India, Indonesia and Thailand, and it would be time-consuming, especially for small businesses, to identify new suppliers with the same quality and price point should GSP status be revoked. Furthermore, the chemical sectors in these countries are still developing and should be allowed to take advantage of the benefits that GSP status provides.

“We encourage USTR to keep these three countries as GSP beneficiary countries. Removing these countries from the GSP program has the potential to harm hundreds, if not thousands, of U.S. businesses and increase prices across a wide swath of industries.”

According to an analysis conducted by John Dunham & Associates on behalf of NACD, elimination of GSP imports from India, Indonesia and Thailand would lead to nearly $2.2 billion in chemical products newly subject to tariffs ranging from 0.1% to 6.5%. Based on these tariff rates, products currently imported duty-free from these nations under the GSP would be subject to an annual tariff of more than $112 million, equal to a price increase of 4.9% on these goods. Based on the model developed for NACD, the resulting price increase would lead to reduced sales, lost jobs and lower wages, with a total cost to the American economy in the chemical distribution industry estimated to be as high as $33.6 million.