The withdrawal could affect hundreds of millions of dollars of imports each year

The withdrawal could affect hundreds of millions of dollars of imports each year

The US is set to withdraw Russia’s eligibility for trade benefits under the Generalized System of Preferences (GSP) programme, which could affect hundreds of millions of dollars of imports each year.

The announcement comes as the US and other Western powers announce tougher economic sanctions against Russia amid escalating tension in Ukraine, but President Barack Obama made no mention of the crisis in his GSP announcement.

Instead he said that Russia was “sufficiently advanced economically” that it no longer warranted preferential treatment, which should be reserved for “less advanced developing countries”.

Once the benefits are withdrawn, US imports of previously GSP-eligible goods from Russia will be subject to normal rates of duty.

However, the entire GSP programme is currently suspended as Congress failed to re-authorise it last summer.

According to US Trade Representative figures, some US$296m of imports from Russia benefited from the GSP programme in 2013.

US Trade Ambassador Mike Froman said of the announcement: “Russia has advanced beyond the level of economic development and competitiveness for GSP eligibility.

“As such, Russia should no longer qualify to receive GSP benefits.

“The President’s decision is consistent with the World Bank’s designation of Russia as a ‘high income country’, as well as actions by the European Union and Canada to remove Russia from similar programmes.”

While most textile and apparel products, and certain footwear items, are excluded from the US's GSP scheme, suspension of the system is seen as sending out a powerful signal to government and business leaders.