Import Controls
Import Controls
In addition to virtual embargoes on goods from Vietnam, Cambodia, North Korea, Laos, and Cuba, the United States uses the 1930 tariff rates (the highest in U.S. history) on goods coming from Albania, Bulgaria, Mongolia, and Romania. The embargoes as well as the failure to grant most-favored-nation status put much HPE production at a competitive disadvantage in the U.S. market. (As of late 1990, China, Czech and Slovak, Hungary, Poland, and the former USSR did receive MFN treatment in the United States.)46 Because of the high level of education and labor skills of many HPE populations, Western companies are interested in sourcing production in those countries. Or, they may seek markets within the HPEs but export sufficient amounts to earn foreign exchange. The lack of MFN status hampers these potentials. Furthermore, even when MFN treatment is extended, it may be taken away, thus increasing operating uncertainties. For example, the U.S. suspended Poland's MFN status in 1951, gave it back in 1960, suspended it again in 1982, and restored it again in 1987.47 In 1990, a year after the Tiananmen Square suppression, China barely missed losing its MFN status in a U.S. Congressional vote. At the time, Nike was exporting about $100 million of shoes (mainly to the U.S.) and employing about 8000 people in China. Without MFN treatment, Nike would have been forced to shift production to Indonesia and Thailand. Mattel would have experienced a U.S. duty of 70 percent on Barbie dolls, instead of the 7.6 percent. The threat of MFN suspension for China led Reebok to abandon its Chinese production and influenced China to free 211 prisoners in an effort to prevent U.S. actions.48
Most HPEs are also highly protectionistic in their purchases of Western goods. When one talks about trade liberalization in the West, the context is usually one of reducing tariffs. Recent discussion of HPE trade liberalization is at an entirely different level, referring to such factors as decentralized import buying, invoicing in convertible currencies, and the lifting of quantitative restrictions.49 Meanwhile, HPE tariffs remain high.
Because U.S. import controls are not the same for all HPEs, problems sometimes emerge if goods are transshipped from one HPE to another so that they arrive in the United States from a country for which there are few import restrictions. For example, the United States has an embargo on imports from Cuba: The United States ceased importing nickel from the former Soviet Union because of claims that Cuban nickel was reaching the United States through transshipments.50 Given the likely continued dependence of former COMECON countries on each other, the questions of origin and destination will probably continue.
In addition to virtual embargoes on goods from Vietnam, Cambodia, North Korea, Laos, and Cuba, the United States uses the 1930 tariff rates (the highest in U.S. history) on goods coming from Albania, Bulgaria, Mongolia, and Romania. The embargoes as well as the failure to grant most-favored-nation status put much HPE production at a competitive disadvantage in the U.S. market. (As of late 1990, China, Czech and Slovak, Hungary, Poland, and the former USSR did receive MFN treatment in the United States.)46 Because of the high level of education and labor skills of many HPE populations, Western companies are interested in sourcing production in those countries. Or, they may seek markets within the HPEs but export sufficient amounts to earn foreign exchange. The lack of MFN status hampers these potentials. Furthermore, even when MFN treatment is extended, it may be taken away, thus increasing operating uncertainties. For example, the U.S. suspended Poland's MFN status in 1951, gave it back in 1960, suspended it again in 1982, and restored it again in 1987.47 In 1990, a year after the Tiananmen Square suppression, China barely missed losing its MFN status in a U.S. Congressional vote. At the time, Nike was exporting about $100 million of shoes (mainly to the U.S.) and employing about 8000 people in China. Without MFN treatment, Nike would have been forced to shift production to Indonesia and Thailand. Mattel would have experienced a U.S. duty of 70 percent on Barbie dolls, instead of the 7.6 percent. The threat of MFN suspension for China led Reebok to abandon its Chinese production and influenced China to free 211 prisoners in an effort to prevent U.S. actions.48
Most HPEs are also highly protectionistic in their purchases of Western goods. When one talks about trade liberalization in the West, the context is usually one of reducing tariffs. Recent discussion of HPE trade liberalization is at an entirely different level, referring to such factors as decentralized import buying, invoicing in convertible currencies, and the lifting of quantitative restrictions.49 Meanwhile, HPE tariffs remain high.
Because U.S. import controls are not the same for all HPEs, problems sometimes emerge if goods are transshipped from one HPE to another so that they arrive in the United States from a country for which there are few import restrictions. For example, the United States has an embargo on imports from Cuba: The United States ceased importing nickel from the former Soviet Union because of claims that Cuban nickel was reaching the United States through transshipments.50 Given the likely continued dependence of former COMECON countries on each other, the questions of origin and destination will probably continue.
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