(RIA Novosti) - Russia could lose $1 billion a year after the United States announced it was one of 13 countries that could be dropped from a preferential treatment program for emerging economies.
U.S. Trade Representative Susan Schwab announced Monday sweeping review of trade benefits covered by the Generalized System of Preferences, which might lead to preferential treatment under the program being targeted on more less-developed countries than more advanced developing countries, reports Trend.
The move comes after negotiations between Moscow and Washington on Russia's bid to join the World Trade Organization stalled in July over differences and the Bush administration imposed sanctions on two Russian companies, state-arms exporter Rosoboronexport and aircraft maker Sukhoi, for allegedly cooperating with Iran.
On Tuesday, the Office of the U.S. Trade Representatives asked for public comments on whether duty-free trade benefits should be limited or withdrawn for countries whose shipments to the U.S. exceeded $100 million in 2005 and met one of two criteria. The two criteria were that a country's 2005 World Bank classification as an upper-middle-income economy or a country's total exports in 2005 totaling 0.25% or more of all global exports.
Russia is a leading global commodity exporter and the world's no.2 oil exporter after Saudi Arabia.
The GSP program covers 133 countries, but only 13 of them meet those guidelines: Argentina, Brazil, Croatia, India, Indonesia, Kazakhstan, the Philippines, Romania, Russia, South Africa, Thailand, Turkey and Venezuela, according to information supplied by the USTR.
The program was established in 1976 and has been renewed eight times, most recently in 2002. It expires at the end of 2006 and Congress must renew it for benefits to continue.
According to USTR, the 133 countries covered by the program exported $26.7 billion worth of goods to the U.S. market duty free under the GSP in 2005, with India ($4.2 billion), Brazil ($3.6 billion), Thailand ($3.6 billion) and Indonesia ($1.6 billion) among its main beneficiaries.