Indo-US trade: Lawmakers warns against policy change

Top law makers led by Chairman of Foreign Affairs Committee of the House of Representatives Tom Lantos have urged the Bush administration to maintain favorable conditions for importing products from India to keep up the pace of its trade with the United States.

"It is in the US national interest to improve economic and political ties with South Asia, and with India in particular," Lantos said.

"Changing our policy now would be a setback for manufacturers who have come to rely on the current system, and it could disrupt relations with Delhi after Washington has invested so much in improving them in recent years."

Lantos and 16 lawmakers have written a letter to the US Trade Representative Susan Schwab urging her to continue letting Indian jewelry be imported duty-free to the United States under its Generalized System of Preferences.

Legislation passed in the last session of Congress stated that the President should reverse this benefit by revoking a waiver creating the duty-free status.

The lawmakers have said that evoking the waiver "would adversely affect opportunities for several hundred thousand poor workers in India and would frustrate the purpose of the GSP program, which is to promote development through trade liberalization."

It also noted that no domestic US manufacturer would benefit from the proposed policy change because the imports do not compete with jewelry currently produced in the United States.

The legislators also noted that the provision suggesting the waiver repeal was inserted without careful consideration.

"No public hearings were held and, to our knowledge, there has been no examination as to what impact waiver revocation would have on trade flows, development, and the United States' domestic retail jewelry industry. We believe there is very little support for this provision in Congress," they said.