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. Last Updated: 07/27/2016

Bush Unveils Plan for 'Duty-Free' World

WASHINGTON -- U.S. President George W. Bush's administration, hoping to jump-start global trade negotiations, was to propose a plan on Tuesday to eliminate all tariffs on industrial and consumer goods by 2015, officials said.

The plan, which was to be submitted to the World Trade Organization in Geneva, would cover not only big industrial products like cars and machinery but also labor-intensive consumer goods like clothing, textiles and leather handbags that are still fairly heavily protected in the United States.

Administration officials said their plan would "turn every corner store into a duty-free shop" and would eliminate about $18 billion in tariffs that American consumers pay each year.

While the offer to open U.S. markets is in many respects radical, it also plays to the United States' strengths and would require most other countries to cut their tariffs more drastically and more rapidly than the United States.

Trade experts say the Bush administration may also be trying to regain credibility on free-trade issues after giving into demands for protectionist measures from the steel industry and from farmers earlier this year.

The proposal is almost certain to run into objections from many countries in Latin America and Asia, which are likely to argue that their domestic industries would have to endure severe competitive jolts on the industrial side while still facing steep barriers to U.S. markets for agriculture.

U.S. tariffs on manufactured products average about 5 percent, lower than those in many developing countries, but they run as high as 20 percent for certain kinds of clothing, 16 percent for many kinds of luggage and 13 percent for some leather goods.

The United States also imposes a wide variety of anti-dumping and safeguard tariffs on imported steel, which run well above 30 percent in some cases and are not expected to be affected by the new plan.

"The strategy could be to get on the good side of the rhetorical fight," said Gary Hufbauer, a trade analyst at the Institute for International Economics, a research group in Washington.

Scott Otteman, director of trade policy at the National Association of Manufacturers, expressed cautious support for the idea.

Many manufacturing groups have lobbied in favor of negotiating for deep reciprocal tariff cuts in particular industrial sectors, but Otteman said the group is leery of relying only on across-the-board tariff reductions.

The new proposals will be announced on Tuesday by U.S. trade representative Robert Zoellick and Commerce Secretary Donald Evans.

They are being submitted as part of the global trade talks that were started last year in Doha, Qatar. U.S. officials hope to inject some electricity into the talks, which have lost considerable momentum over the last year in large part because both the United States and the European Union have been backsliding toward greater protectionism.

The Bush administration infuriated governments around the world by imposing new tariffs on imported steel last March. Attitudes toward free trade soured even more after Congress passed and Bush signed a sweeping farm bill that could provide up to $180 billion in farm subsidies over the next six or eight years.

Under the plan, any tariff that is 5 percent or lower would be eliminated in 2005, the year that countries hope to adopt a new global trade agreement. Other, higher tariffs would then be "harmonized" and reduced to no more than 8 percent by 2010. The most difficult tariff issues would be dealt with by 2015.

The European Union has submitted a somewhat more modest proposal, which calls for cutting the highest tariffs on manufactured goods rather than eliminating all tariffs.