A US chamber-led coalition of nearly 180 companies and associations has urged Congress to approve a tax and trade package including renewal of a programme offering trade benefits to India.
The coalition representing a broad spectrum of the US business community made the plea to approve six "critical programmes that would expand US trade and economic competitiveness and promote a number of US foreign policy objectives" in a letter on Friday to House and Senate leaders.
Specifically, it urged the lame-duck session of Congress to renew the Generalised System of Preferences (GSP) programme describing it as "an effective trade tool bolstering domestic manufacturing, expanding consumer choice, and promoting economic growth in developing countries."
Allowing GSP to expire could lead to months of significant trade disruption. Not only will GSP beneficiary countries suffer losses of important export orders, but American companies who rely on lower-cost preference programme inputs-which often include raw materials, components and parts used in US manufacturing-will see their costs escalate and their competitiveness decline, it said.
"Moreover, small and medium-sized businesses will suffer the most, since they lack financial resources to pay the import duties that will re-emerge if Congress does not act," said the letter to Republican House speaker J Dennis Hastert, Senate majority leader Bill Frist and House and Senate Democratic minority leaders, Nancy Pelosi and Harry Reid.
The US Trade Representative (USTR) is currently looking at a proposal to limit, suspend or withdraw trade preferences to India and a dozen other countries as part of a major GSP review ordered after the collapse of world trade talks.