Two tire makers and an importer/distributor are going head-to-head with the United Steelworkers (USW) over whether tires imported from Thailand should have duty-free status under the Generalized System of Preferences (GSP).
Bridgestone Americas Tire Operations L.L.C., Sumitomo Rubber (Thailand) Co. Ltd. and Falken Tire Corp. have petitioned the Office of the U.S. Trade Representative (USTR) to keep tire imports from Thailand exempt from the 4-percent tariffs usually levied on imported tires.
Thai imports represent only a small part of tire imports to the U.S.about 3.5 percent of passenger and light truck tire importsbut are crucial to their worldwide distribution strategies, the tire makers argued. Furthermore, it's a bad idea to do anything to raise tire prices when the high tariffs on Chinese imports are already causing all tire prices to increase, they said.
The USW, however, said it opposed preferential treatment for any imported tires.
We sought relief to counter the incredible surge of Chinese tires and to help stop the further loss of jobs, the USW said in a Jan. 21 submission to USTR. We certainly did not bring that petition so that companies could then seek waivers under the GSP system to avoid the special safeguard remedy and undermine its effect.
The USTR called for comments in the Jan. 5 Federal Register on whether the competitive need limits (CNLs) should be waived for Thai tire imports under the GSP system.
CNLs are import ceilings for determining duty-free access for goods classified under GSP. Under revisions to the GSP program made by Congress in 2006, the president should revoke CNL waivers in effect for five years or more if the imported goods exceed 150 percent of the CNL or 75 percent of the total value of imports from the country in question.
Bridgestone, Sumitomo and Falken all argued in Jan. 21 submissions to the USTR that CNL waivers should stay in place for tires imported from Thailand. They had petitioned for continued CNL waivers in November 2009.
If the value of Thai tire imports has increased, they said, it was due largely to price increases caused by the tariffs on Chinese tires instituted last September.
Any limited overage of the CNL for Thai-origin imports is likely related, at least in part, to the supply and price shocks caused by the safeguard tariff, Bridgestone said in its submission. Revoking duty-free status for Thai imports, the Nashville, Tenn.-based tire maker said, would only penalize the Thai tire industry for U.S. market conditions it did nothing to create.
However, the USW said the tire makers' argument was a slap in the face to U.S. tire workers who have suffered because of import penetration in the domestic market.
These petitioners are subsidiaries and affiliates of multi-billion-dollar multinational tire producers who should be ashamed to seek an increase in preferential tariff treatment for an industry that manifestly does not need any preferential treatment in order to compete in the U.S. market, the USW said.
Attorneys for the tire makers could not be reached for comment befor Tire Business deadline, and a spokesman for the Rubber Manufacturers Association (RMA) declined comment.
The Tire Industry Association (TIA) hasn't heard from its members on the Thailand CNL issue, according to Paul Fiore, TIA director of government and business relations. But TIA's members more than likely oppose anything that would affect tire prices or the flow of product to this country, he said.
A public hearing the USTR had scheduled for Feb. 11 at its Washington headquarters on the CNL waiver petitions for Thai tire imports was postponed due to the weather in the nation's capital. For the time being, the agency has set a deadline of March 4 for post-hearing briefs and April for its report on the issue. It will announce its decision on or about June 30, according to the Federal Register notice.
To reach Miles Moore: [email protected]; 202-662-7211.
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