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Trade agreement expiration means Ecuador flowers will carry a new 6.8 percent tariff

The pending expiration July 31 of the Andean Trade Promotion & Drug Eradication Act and the U.S. Generalized System of Preferences program, referred to as GSP, will increase the price of flowers imported from Ecuador into the United States by 6.8 percent by slapping an import tariff on them.

The Ecuadorian Trade Office in Chicago launched a campaign, “Keep Trade Going,” on May 15 to highlight the country’s importance as a U.S. trading partner as well as the quality of Ecuador’s products.

At press time in late June, no bill had been introduced in the U.S. Congress to extend either or both of the agreements. On June 14, 15 nations including Ecuador formed an alliance of GSP countries to urge extension of duty-free treatment of U.S. imports from their countries.

A letter sent by their ambassadors to members of Congress claimed that in 2012, the GSP saved U.S. companies and consumers $750 million in duties on $20 billion of U.S. imports.

Ecuador supplies about 30 percent of the cut roses purchased in the United States. Ecuador exported $400 million worth of cut flowers of all varieties, in market value, to the United States in 2012.

Ecuadorian officials would prefer to have the ATPDEA extended because the program covers all products, but as an alternative wants to have cut flowers and more of its products classified as duty-free under GSP.

Colombia won a battle to secure a separate trade agreement with the United States last year. The pact specified that tariffs collected from the date an earlier extension of the ATPDEA expired could be refunded to importers.

Industry observers said many importers have already factored the 6.8 percent tax increase on cut flowers from Ecuador into their plans.