Memorandum on Amendments to the Generalized System of Preferences

Memorandum for the United States Trade Representative

Subject: Actions Concerning the Generalized System of Preferences

Pursuant to subsections 502(b)(4) and 502(b)(7) and section 504 of the Trade Act of 1974, as amended (the Act) (19 U.S.C. 2462(b)(4), 2462(b)(7), and 2464)), I have determined to modify the application of duty-free treatment under the Generalized System of Preferences (GSP) currently being afforded to certain beneficiary developing countries, to make a determination concerning the alleged expropriation without compensation by a beneficiary developing country, and to make findings concerning whether steps have been taken or are being taken by certain beneficiary developing countries to afford internationally recognized worker rights to workers in such countries.

Specifically, after considering a private sector request for a review concerning the alleged expropriation by Venezuela of property owned by a United States person allegedly without prompt, adequate, and effective compensation, without entering into good-faith negotiations to provide such compensation or otherwise taking steps to discharge its obligations, and without submitting the expropriation claim to arbitration, I have determined to continue to review the status of such alleged expropriation by Venezuela.

Second, after considering various private sector requests for a review of whether or not certain beneficiary developing countries have taken or are taking steps to afford internationally recognized worker rights (as defined in subsection 502(a)(4) of the Act) to workers in such countries, and in accordance with section 502(b)(7) of the Act, I have determined that Israel and Malaysia have taken or are taking steps to afford internationally recognized worker rights, and I have determined that Burma and the Central African Republic have not taken and are not taking steps to afford such internationally recognized rights. Therefore, I am notifying the Congress of my intention to suspend the GSP eligibility of Burma and the Central African Republic. Finally, I have determined to continue to review the status of such worker rights in Haiti, Liberia, and Syria.

In the case of Israel, I did not review worker rights matters concerning the West Bank and Gaza Strip because they are not a part of the "country" of Israel as contemplated in section 502(b)(7) of the Act. The United States has consistently refrained from formal determinations that would have the effect of recognizing, either impliedly or expressly, the de jure incorporation of the occupied territories into Israel.

Further, in order to convert and implement prior decisions taken in terms of the Tariff Schedules of the United States (TSUS) into the nomenclature structure of the Harmonized Tariff Schedule of the United States (HTS) and after consideration of a private sector request for a waiver of the application of section 504(c) of the Act (19 U.S.C. 2464(c)) with respect to certain eligible articles from Mexico, I have determined to modify the application of duty-free treatment under the GSP currently being afforded to certain articles and to certain beneficiary developing countries.

Specifically, I have determined, pursuant to subsection 504(d)(1) of the Act (19 U.S.C. 2464(d)(1)), that the limitation provided for in subsection 504(c)(1)(B) of the Act should not apply with respect to certain eligible articles because no like or directly competitive article was produced in the United States on January 3, 1985. Such articles are enumerated in the list of HTS subheadings in Annex A.

Second, pursuant to subsection 504(c)(3) of the Act, I have determined to waive the application of section 504(c) of the Act with respect to certain eligible articles from certain beneficiary developing countries. I have received the advice of the United States International Trade Commission on whether any industries in the United States are likely to be adversely affected by such waivers, and I have determined, based on that advice and on the considerations described in sections 501 and 502(c) of the Act (19 U.S.C. 2461 and 2462(c)), that such waivers are in the national economic interest of the United States. The waivers apply to the eligible articles of the beneficiary developing countries that are enumerated in Annex B opposite the HTS subheadings applicable to each article.

Finally, I have determined, pursuant to subsection 504(c)(2) of the Act and after taking into account the considerations described in sections 501 and 502(c) of the Act, that certain beneficiary developing countries have demonstrated a sufficient degree of competitiveness (relative to other beneficiary developing countries) with respect to certain eligible articles. Therefore, I have determined that subsection 504(c)(2)(B) of the Act should apply to such countries with respect to such articles. Such countries are enumerated in Annex C opposite the HTS subheadings applicable to each article.

These determinations shall be published in the Federal Register.

George Bush

[Filed with the Office of the Federal Register, 10:43 a.m., April 14, 1989]