WASHINGTON, May 8 (RIA Novosti) – The US decision to withdraw a number of trade concessions for Russia is not part of the sanctions and would affect about two percent of Russian exports, mainly metal supplies, source in the Russian trade mission told RIA Novosti Thursday.
“This is not linked to sanctions in any way. The decision just comes at a politically difficult moment. It has long been expected, voiced already last year. Russia has become a country with a high level of income according to the World Bank methodology, and the Generalized System of Preferences (GSP) applies only to developing countries with low and middle incomes. It is not that the US administration has taken some harsh decision, it’s just that the GSP expires automatically by law,” a spokesman for the Russian trade mission said.
According to the source, Russian goods supplied to the US under the GSP program amount to about half a billion dollars a year, as exemplified by the data for 2010.
“A total worth of $550 million was imported back then. This accounted for 2 percent of Russian exports that fell under the program. The trade we have is relatively stable, and so is its structure, so we can assume that now the GSP exports are somewhere around $500 million per year,” he said, explaining that GSP concessions are withdrawn for about 3,5 thousand items, but as of 2010 only 350 were imported from Russia.
“In general, the qualified goods are completely different. But for Russia these are mainly precious metals, in particular, ferrosilicon, ferrochrome, vanadium,” the source elaborated, stating that Russia is unlikely to stop supplying these goods, as the competitive advantage for a number of items remains even given the customs duty.
In an official letter to the US Congress President Barack Obama announced Wednesday the plans to pull Russia from a trade benefits program for developing countries, because “Russia is sufficiently advanced in economic development.”
The US Generalized System of Preferences (GSP) is a program designed to promote economic growth in the developing world by providing preferential duty-free entry for up to 5,000 products when imported from one of 123 designated beneficiary countries and territories.
GSP was instituted on January 1, 1976, by the Trade Act of 1974. Legal authorization of the GSP program expired on July 31, 2013. The US Congress is considering legislation that would extend the authorization of GSP beyond this date.