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Cafta has processors feeling left out

Following narrow passage by the U.S. Senate and the House of Representatives, where it squeaked by in a 217 to 215 vote, President Bush signed the Central American Free Trade Agreement (Cafta) on August 2, effectively ending debate on the controversial trade pact. The work for the Society of the Plastics Industry (SPI; Washington DC), however, is just beginning with processed products like film, sheet, and tubes still subject to tariffs as high as 20% in some cases.

If ratified by the member countries (Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua, and the Dominican Republic), which is anticipated in January 2006, the measure would immediately remove duties on resin, equipment, and molds, but as it stands, processed products would still be subject to tariffs to be reduced over a 5- to 10-year time period.

SPI, with the help of Representative Mark Souder (R-IN), did lobby, however, for processed plastics to be included in a group of items within a tariff acceleration agreement, where those tariffs could be removed more quickly.

As it stands, however, pipe, tube, sheet, film, packaging, housewares, building wares, and a broad catch-all category (3926 in the harmonized tariff system), continue to face duties.

"Certainly those are critical products for the US industry," explains Karen Toliver, SPI''s senior director, international trade and industry statistics. "They also happen to be the products where we are shipping the most product down to those countries, which is, practically speaking, probably why they wanted to keep the tariff protection in place."

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