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US
Launches Plan To Abolish Key Tariffs
By
Edward Alden
The US will on Tuesday unveil a bold proposal to eliminate tariffs on manufactured goods, calling for countries in the World Trade Organisation to sweep away all duties no later than 2015. The initiative is aimed at jump-starting the faltering Doha round of international trade negotiations, which have been overshadowed by a series of US proposals for bilateral trade agreements. The idea could also help re-build flagging corporate enthusiasm in the US for further trade liberalisation. The proposal, to be rolled out in Washington by Robert Zoellick, the US Trade Representative, and Donald Evans, the commerce secretary, will be presented as the culmination of a 50-year effort to remove tariffs, a grand idea the US hopes can renew momentum for tearing down trade barriers. The key elements of the US proposal, according to industry and congressional officials briefed on the plan, are: A rapid reduction in high tariffs on non-agricultural products, so that by 2010 there would be no tariffs above 8 per cent. All tariffs would then be reduced progressively to zero by 2015. The elimination, no later than 2010, of all duties that are currently below 5 per cent. A parallel initiative calling for faster elimination of tariffs in many industrial sectors such as chemicals, paper, wood and construction equipment. Under the scheme, developing countries would have to make the biggest cuts because their average tariffs are much higher than in the advanced economies. On industrial machinery, for example, tariffs are 1.2 per cent in the US and 1.8 per cent in the European Union but 35 per cent in Argentina and 36 per cent in India. Under the US proposal, the US and EU would have to scrap those tariffs by 2010 while other countries would have to cut tariffs to about 6.5 per cent by that time. The US hopes to entice developing countries by promising rapid cuts in its own remaining high tariffs. The average US tariff of 17.5 per cent on clothing would be cut to 5.5 per cent by 2010. The US is also trying to persuade developing countries that it is in their own interests to eliminate high tariffs. A recent study by the National Foreign Trade Council, a US business lobby that provided the blueprint for the US scheme, says developing countries pay $80bn a year in tariffs, more than 70 per cent of it on trade with each other. The NFTC said tariff elimination "creates the grand political bargain needed to beat powerful protectionist interests in both rich and poor countries." Paul O'Neill, Treasury secretary, hinted at the initiative in a speech on Monday in Manchester, northern England. He said the US response to Japanese competition in the 1980s cemented his belief "that the world economic system should eliminate trade and tariff barriers not only because open trade gives consumers around the world more choices and better prices but because open trade spurs innovation and productivity growth." In the Doha negotiations, New Zealand last month proposed scrapping all non-agricultural tariffs, but put no deadline on it. The EU and Japan have tabled less ambitious proposals. The EU urged reduction of the highest tariffs, while Japan suggested a much slower pace for reducing all tariffs.
Copyright
© 2002 Global Action on Aging
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