[Congressional Record Volume 141, Number 205 (Wednesday, December 20, 1995)]
[Senate]
[Pages S19013-S19014]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                   GENERALIZED SYSTEM OF PREFERENCES

 Mr. PRYOR. Mr. President, renewal of the Generalized System of 
Preferences [``GSP''] duty-free import program is currently up for 
consideration as part of the budget reconciliation package. The GSP 
program allows duty-free imports of certain products into the U.S. from 
well over 100 GSP eligible nations as a way to help less developed 
nations export into the U.S. market. While I support this program, 

[[Page S19014]]
it is essential to remember that from its inception in the Trade Act of 
1974, the GSP program has provided for the exemption of ``articles 
which the President determines to be import-sensitive.'' This is a 
critical provision to many of our industries.
  Mr. President, a clear example of an import sensitive article which 
should not be subject to GSP is ceramic tile. The U.S. ceramic tile 
market has been repeatedly recognized as extremely import-sensitive. 
During the past thirty-years, this U.S. industry has had to defend 
itself against a variety of unfair and illegal import practices carried 
out by some of our closest trade partners. Imports already dominate the 
U.S. ceramic tile market and have done so for the last decade. They 
currently provide nearly 60 percent of the largest and most important 
glazed tile sector according to the 1994 year-end government figures.
  Moreover, a major guiding principle of the GSP program has been 
reciprocal market access. Currently, GSP eligible beneficiary countries 
supply almost one-fourth of the U.S. ceramic tile imports, and they are 
rapidly increasing their sales and market shares. U.S. ceramic tile 
manufacturers, however, are still denied access to many of these 
foreign markets.
  Also, previous abuses of the GSP eligible status with regard to some 
ceramic tile product lines has been well documented. In 1979, the USTR 
rejected various petitions for duty-free treatment of ceramic tile from 
certain GSP beneficiary countries. With the acquiescence of the U.S. 
industry, however, the USTR at that time created a duty-free exception 
for the then minuscule category of irregular edged ``speciality'' 
mosaic tile. Immediately thereafter, foreign manufacturers from major 
GSP beneficiary countries either shifted their production to 
``specialty'' mosaic tile or simply identified their existing products 
as ``specialty'' mosaic tile on customs invoices and stopped paying 
duties on these products. These actions flooded the U.S. market with 
superficially restyled or mislabeled duty-free ceramic tile.
  Mr. President, in light of the increasing foreign dominance of the 
U.S. ceramic tile market, for whatever reason, the U.S. industry has 
been recognized by successive Congresses and Administrations as 
``import-sensitive'' dating back to the Dillon and Kennedy Rounds of 
the General Agreement of Tariffs and Trade (GATT). Yet during this same 
period, the American ceramic tile industry has been forced to defend 
itself from over a dozen petitions filed by various designated GSP 
eligible countries seeking duty-free GSP treatment for their ceramic 
tile sent into this market.
  The domestic ceramic tile industry has been fortunate, to date, in 
the fact that both the USTR and the International Trade Commission thus 
far have recognized the ``import-sensitivity'' of the U.S. market and 
have denied these repeated GSP petitions that would result in further 
import penetration. If, however, just one petitioning nation ever 
succeeds in gaining GSP benefits for ceramic tile, then all GSP 
beneficiary countries also are entitled to GSP duty-free benefits for 
ceramic tile. If any of these petitions were grated, it would eliminate 
American tile jobs and could devastate this domestic industry.
  Mr. President, I believe an import sensitive and already import-
dominated product such as ceramic tile should not have to continually 
defend itself against repeated duty-free petitions but should be 
exempted from this program in some manner. While I understand USTR has 
serious reservations about granting exemptions without periodic review, 
I am hopeful we can find some common ground so that the ceramic tile 
industry does not have to defend itself each and every year.
  While I support reauthorization of the GSP program, I trust and 
expect that import-sensitive products such as ceramic tile will not be 
subject to GSP.

                          ____________________