MercoPress. South Atlantic News Agency

Kirchner reacts to US trade decision on GPS

Argentine president Nestor Kirchner criticised Tuesday the possible end of preferential trade benefits announced earlier this week by the United States government.

However from Washington Argentine Ambassador Jose Octavio Bordon downplayed the potential impact of the decision which refers to duty free imports of specific products from developing countries which is up for renewal at the end of 2006..

Under the General Preferences System import duties are waived on thousands of products from developing nations, making them more attractive in the United States.

The US imported 26.7 billion US dollars worth of goods from 133 developing countries under the GSP and the office of the US Trade representative, Susan Schwab, said the Bush government would now consider whether to "limit or withdraw" the eligibility of 13 countries for the scheme.

The GPS benefited Argentina to the extent of 616 million US dollars last year.

"It's important to underline that Argentina no longer has carnal relations, it's independent and under no aspect does, to make decisions, take into account actions which we consider absolutely out of touch or very serious", said President Kirchner.

"Argentina recalls what carnal relations mean: a dependent country, hunger, the dismantling of industry, of export industries, relations which subordinated us to policies which we should have never accepted or subordinated to" insisted the Argentine president.

Under the administration of former president Carlos Menem, his Foreign Secretary Guido Di Tella used to talk about "carnal relations with the US".

"Let's get this absolutely straight: Argentina makes its own decisions", he insisted, although admitting United States is entitled to make all the reviews it feels necessary. Among those thirteen countries having their GSP positions reviewed are Argentina, Brazil, Venezuela and Mexico.

All of them shipped more than 100million US dollars worth of goods to the United States under the GSP scheme in 2005 or were responsible for more than 0.25% of world exports.

"One of the concerns that Congress has raised is that GSP benefits go largely to a few countries, while many developing countries are not trading much under the program" said Ms Schwab. "We want to ensure that we are operating the program as Congress intended".

Nevertheless the news comes after long-running World Trade Organization (WTO) talks failed last month and many in the US Congress blamed the collapse on the failure of countries such as Brazil and India to open up their own markets to imports from countries such as United States.

But Argentine Ambassador Bordon minimized the impact saying it will only affect at the most 1.5% of Argentina's exports.

"It's incorrect to talk about trade sanctions. United States is ending preferential tariffs which it extended to certain countries and goods", pointed out Mr. Bordon.

"GSP involves 600 million US dollars equivalent to 1.5% of total Argentine exports and 15% of sales to the US".

Bordon said that the GSP includes 3.400 products and over a hundred countries, so "interpreting the decision as an exclusive relation with Argentina is inconsistent".

Argentina exported 40 billion US dollars last year with 4 billion going to the US.