USTR to review Thailand’s pork GSP trade benefits

NPPC alleges that Thailand maintains an array of import restrictions on U.S. pork, including uncooked pork and pork produced with ractopamine.

The Office of the U.S. Trade Representative (USTR) has agreed with a request from the National Pork Producers Council (NPPC) to review Thailand’s eligibility for the U.S. Generalized System of Preferences (GSP) program because of that country’s failure to provide access to its market for U.S. products, including pork.

NPPC, which last month filed a GSP review petition with USTR, is urging the Trump Administration to withdraw or limit the benefits Thailand receives under the preferential trade program, which gives duty-free treatment to certain goods entering the U.S. The program allows for removal of a country’s benefits if it fails to provide the U.S. with “equitable and reasonable access” to its market.

“GSP eligibility criteria are a core element to the success and fairness of the program,” deputy U.S. Trade Representative Jeffrey Gerrish said. “Congress directs USTR to ensure that beneficiary countries are permitting equitable and reasonable market access for American goods. The petition from the National Pork Producers Council raises important questions regarding Thailand’s compliance with this criterion for GSP eligibility.”

NPPC contends that Thailand has not adopted a “maximum residue limit” for ractopamine in line with the U.N. Codex Alimentarius Commission's standard and has not otherwise produced a science-based risk assessment justifying its regulation. Further, NPPC alleges that the government of Thailand rarely, if ever, grants import licenses for U.S. pork and that the few shipments that are licensed are charged excessive inspection fees.

“Thailand, for years, has willfully denied equitable access to our products,” said NPPC president Jim Heimerl, a pork producer from Johnstown, Ohio. “We’re pleased that USTR is going to look into the unfair treatment U.S. goods are getting from Thailand.”

Despite the U.S. being Thailand’s number-one export market, sending almost $4 billion of products annually to America under GSP, the Southeast Asian nation has a de facto ban on U.S. pork imports through high tariffs and several non-tariffs barriers.

Its 2015 average applied most favored nation (MFN) tariff rate on agricultural imports was nearly 31% (its average MFN rate on non-agricultural products was 7.7%), and its ad valorem tariffs were as high as 337%. Most of the highest rates apply to agricultural imports that compete with domestic goods, including beef, pork and poultry.

Among its non-tariff restrictions, Thailand does not accept uncooked pork and pork offal from the U.S., and it rarely grants import licenses for U.S. pork. Even if such permits are granted, Thailand imposes a fee for imported pork currently equal to about $220 per metric ton, compared with $7.50/mt for domestically produced pork.

The restrictions have severely limited U.S. pork exports to Thailand. In 2017, for example, the U.S. shipped just 31 mt of pork to Thailand’s 69 million people, who eat about 726,000 mt of pork annually. (The U.S. actually sent more pork to Tonga’s 107,000 people.)

“Thailand’s treatment of U.S. pork provides a clear basis for removing or limiting its GSP benefits,” Heimerl said. “We hope the Administration will take action as a way to convince that country to rescind its current import restrictions on U.S. pork and other products.”

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