WASHINGTON (Oct. 26, 2011)—President Obama's Oct. 26 signing into law a renewal of the U.S. Generalized System of Preferences will allow duty-free treatment for tires and other rubber products made in South Korea, Panama, and Colombia.
The renewed laws will greatly increase the U.S. tire trade, especially with South Korea, the Tire Industry Association said in a press release.
“The renewal of the (South Korean) program removes 95 percent of the existing tariffs within five years for goods and services covered by the pact,” said Roy Littlefield, TIA executive vice president, in a press release. “The agreement also provides greater access to the Korean government procurement market for American companies.”
The South Korean FTA gradually reduces the tariff on imported South Korean passenger and truck radial tires from the current 4 percent to 0 percent by the fifth year of the agreement, TIA said. The duty-free importing of tires from South Korea will then last for another 15 years until the agreement comes up for renewal.
For U.S. tire manufacturers, South Korean import duties will go from the current 8 percent to 0 percent, TIA said.
The South Korean agreement will particularly help U.S. consumers hurt by the price hike on tires in late 2009 caused by the Section 421 tariffs on Chinese-made passenger and light truck tires, according to TIA. In the wake of these tariffs, South Korean tire imports to the U.S. increased 63 percent, it said.
Both the GSP and the South Korean FTA lapsed on Dec. 31, 2010.
Renewal of GSP and the free trade agreements were criticized by the United Steelworkers union, which said they will endanger U.S. workers.
“Historically, these agreements have closed American manufacturing facilities and cost American jobs,” said USW International President Leo W. Gerard. “It is foolish to think that this latest round will do something different.”
The USW successfully petitioned the Obama administration for the Section 421 tariffs on Chinese tires in 2009. It also later successfully fought to remove duty-free GSP status on tires imported from Thailand.