- The Washington Times - Monday, January 10, 2005

Asian nations battered by last month’s Indian Ocean tsunami are asking for trade concessions, as well as outright aid, to help their economies recover.

Sri Lanka is trying to build support for lower tariffs on its clothing exports, and Thailand and India are hoping that the U.S. International Trade Commission (USITC) will reconsider recently imposed duties on shrimp.

The countries hit hardest by the Dec. 26 natural disaster — Indonesia, Sri Lanka, India, Thailand, the Maldives, Burma, the Seychelles and Somalia — paid close to $1.8 billion in duties to the U.S. Treasury in 2003, about five times more than the U.S. government has promised in aid for the tsunami region so far. The figure is about 11 percent of all duties collected by the United States, according to USITC data.

In Sri Lanka, the clothing industry employs about 15 percent of the country’s work force, and accounts for more than half of all goods exported. The country paid $218.8 million in duties on $499 million in garment exports to the United States in 2003. Exports to the 25-nation European Union also are heavily taxed.

“The European Union and the USA should help disaster-struck countries by immediately improving access to their markets for the clothing and textile exports that are vital to the region’s economies,” the charity Oxfam International said in a document released Friday. Oxfam, generally critical of American and European trade policies, has staff in the region working on relief efforts.

Reuters on Sunday reported that the island nation’s apparel industry was not severely hampered by the tsunami, but that local industry officials see lower tariffs as a way to bolster the economy.

“All we are asking for is a duty suspension by those markets for a period of three years, to give us a leg up immediately. Trade concessions will be much better and more long-lasting than tsunami aid,” Ashroff Omar, chief executive officer of Brandix Lanka Ltd., the country’s second-largest textile and garment maker, told Reuters.

U.S. textile manufacturers oppose lowering the tariffs, and say that competitive pressure from China will do more damage to Sri Lanka’s economy than the recent disaster.

Indonesia and India also send large amounts of clothing to the United States, roughly $2.2 billion each in 2003, though India thus far has refused outside help and Indonesia appears more focused on pressing for international relief from hefty debts.

“Certainly if Sri Lanka asks, everybody else is going to jump on the boat,” said Lloyd Wood, spokesman for the American Manufacturing Trade Action Coalition, a U.S. industry group.

Thailand exports about $2 billion of shrimp per year, roughly half of that to the United States. The industry accounts for 1 to 2 percent of the country’s economic output, according to the Thai Embassy.

The USITC last week slapped duties averaging 17.22 percent on shrimp imports from six countries, including Thailand and India.

The panel said that the countries had violated U.S. trade laws by unfairlyselling their products below the cost of production in the United States.

While the U.S. shrimp industry praised the decision, the timing for Thailand and India was poor.

“It’s bad enough these people suffered the devastation of a tsunami, but then to tax one of their exports is a mistake,” said Ken Pierce, who is a Washington-based attorney for the Thai Frozen Foods Association and some Thai shrimp exporters.

About one-third of Thailand’s shrimp larvae are hatched in Phuket, a city on the Andaman Sea that was hard-hit by the tsunami, Mr. Pierce said.

The USITC recognized the possible impact of the tsunami on India’s and Thailand’s economies and said that it may reconsider the decision to impose tariffs, a process that can take about four months.

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