President Obama suspends Argentina from trade program, adds South Sudan - The Hill (blog)

President Obama announced Monday that he is suspending Argentina from a trade benefits program because the country hasn't paid up more than $300 million in binding awards to U.S. firms. 

The suspension of Argentina from the Generalized System of Preferences program is effective in 60 days.

Meanwhile, the president also said that the Republic of South Sudan would join the GSP. 

“The suspension of Argentina’s GSP eligibility is based on a finding that the country is not in compliance with the statutory GSP eligibility criteria set by Congress,” said U.S. Trade Representative Ron Kirk in a statement.

“Specifically, the Argentine government has failed to pay two longstanding arbitral awards in favor of U.S. companies," he said. 

Kirk urged Argentina to make payment to "allow us to consider reinstating Argentina’s GSP eligibility and promote the growth of a mutually beneficial U.S.-Argentina trade and investment relationship.”

In 2011, U.S. imports from Argentina benefiting from GSP treatment totaled $477 million, about 11 percent of total imports from Argentina, making Argentina the ninth-ranking source of imports under the GSP program last year. 

The GSP program allows developing nations to import certain goods duty-free to help their economies grow through increased trade. Under the program, 129 beneficiary developing countries, including 42 least-developed countries, are eligible to export products to the United States.  

In 2011, the total value of imports that entered the United States duty-free under GSP was $18.5 billion. 

Kirk said the decision to include South Sudan in the GSP is a step toward consideration of country's eligibility for trade benefits under the African Growth and Opportunity Act (AGOA), which provides eligible sub-Saharan African countries with duty-free access for a broader variety of products.

“The president’s designation of the Republic of South Sudan as a GSP beneficiary country provides an opportunity for this newly independent nation to use trade to boost its economic development and, we hope, will encourage it to continue needed economic reforms," Kirk said.  

"We look forward to working with Congress on near-term passage of legislation extending AGOA’s third-country fabric provision, which is crucial for continued success of the program," Kirk said. 

Two House Democrats said Congress backed the president's decision to include South Sudan. 

House Ways and Means Trade subcommittee ranking member Jim McDermott (D-Wash.) and panel member Charles Rangel (D-N.Y.) introduced a bill in July that would designate the Republic of South Sudan as an eligible country under the separate AGOA. 

"Republicans should bring this bill to the floor immediately," McDermott said. 

"Africa is losing business as we speak and the Republic of South Sudan is waiting to become a part of the AGOA circle of growth," he said. 

"AGOA has proven itself to not only help African countries, but it also creates opportunities for U.S. businesses.”

Once the presidential action takes full effect, nearly 4,900 products from South Sudan will be eligible for duty-free treatment. 

For months, lawmakers have been pressing for increased trade with Africa, and there are House and Senate bills to step up U.S. exports. 

On March 20, Sens. Dick Durbin (D-Ill.), John Boozman (R-Ark.) and Chris Coons (D-Del.) introduced legislation that would help create better coordination between the U.S. government, establish comprehensive strategic goals and garner private investments to improve U.S.-Africa business activities. 

“This bill will put the restoration of American competitiveness in Africa at the forefront of our business and development goals," Durbin said.

Last week, Rep. Chris Smith (R-N.J.), chairman of the House Foreign Affairs subcommittee on Africa, Global Health and Human Rights, and Rep. Bobby Rush (D-Ill.) introduced bipartisan legislation that would boost U.S. trade with Africa by 200 percent within 10 years. 

“For the past decade, the United States has pursued the expansion of African exports to the United States under the African Growth and Opportunity Act, but that legislation was designed to be more mutually beneficial to businesspeople on both sides of the Atlantic than it has been,” Smith said.  

“This legislation is aimed at facilitating small and medium enterprises in the United States to increase their exports to Africa," he said. "This will stimulate U.S. job creation and provide needed goods and services to African businesses and consumers.”