U.S. axes trade benefits for Brazil, India, others

By Doug Palmer

WASHINGTON (Reuters) - The United States is terminating some trade benefits for India, Brazil and other developing countries under a program revamped late last year by Congress, U.S. trade officials said on Thursday.

The decision comes just one week after an acrimonious meeting in Potsdam, Germany, between the United States, the EU, Brazil and India that failed to produce a long-awaited breakthrough in world trade talks.

U.S. officials accused the two leading developing countries of making impossible demands for cuts in U.S. farm subsidies, while refusing to substantially open their own markets to more U.S. farm and manufactured goods.

However, the action has its roots in a bill approved by Congress in December which provided new guidelines for determining whether a particular product is eligible for duty-free treatment under the U.S. Generalized System of Preferences program.

Those reforms were motivated by frustration in Congress over Brazil and India's role in the trade talks.

The decision announced on Thursday means Brazil will no longer be able to ship brakes, brake parts and ferrozirconium to the U.S. market without paying U.S. import duties, the U.S. Trade Representative's office said in a statement.

The United States also is revoking duty-free status for gold jewelry and brass lamps from India, methanol from Venezuela, wiring harnesses from the Philippines, gold jewelry from Thailand and kola nuts from Ivory Coast.

India shipped $1.6 billion in gold jewelry and $20 million in brass lamps to the United States under the Generalized System of Preferences program in the first 10 months of 2006, USTR said when it initiated its review last year.

Brazil shipped $242 million in brake and brake parts and $700,000 in ferrozirconium, USTR said.