USTR Denies GSP Waiver For Lauan

Nov 8, 2018

The White House and the Office of the U.S. Trade Representative (USTR) published their annual proclamation of changes to the Generalized System of Preferences (GSP) program on Thursday, November 1. Unfortunately, they did not include a redesignation of a Competitive Needs Limit (CNL) waiver for lauan/meranti plywood from Indonesia in the proclamation, meaning that imports of this plywood are still subject to the 8 percent duty, as they have been since the previous waiver was revoked in 2015. This duty amounts to more than $1 million each month for importers of this plywood, which is factored into the cost that RV manufacturers pay for the material.

The primary cause for the non-acceptance of the RV Industry Association’s petition for a waiver was a report from the International Trade Commission (ITC) that claimed there was domestic production of a “like or directly competitive product.” The RV Industry Association believes the ITC report contains a number of errors, omissions and analytical problems. We submitted a letter detailing these problems to US Trade Representative Robert Lighthizer.

Highlights of the letter include:

  • The ITC used the wrong 10-digit tariff line when analyzing the trade data. They state that our imports come in under a tariff line that accounts for less than 3 percent of total trade in tropical hardwood plywood. At the same time, they agreed with our analysis that we account for 80 percent of the use of plywood. This is impossible.
  • They agreed with our analysis that no imports of the relevant logs occurred from 2015-2017 but did not include that information in the report to USTR.
  • They ignored testimony given under oath by domestic plywood producers to the ITC less than 12 months prior in a Chinese plywood antidumping and countervailing duty case that Indonesian plywood is a separate market and does not compete with domestically produced plywood.

We are working with some of our RV industry champions on Capitol Hill to determine if any further legislative steps are available to overcome this flawed report and once again bring lauan/meranti under the GSP program.