UZBEKISTAN GSP INTERIM DEMARCHE REQUEST

UNCLAS STATE 084124

SIPDIS

E.O. 12958: N/A
TAGS: EAGR ELAB ECON PHUM UZ ETRD
SUBJECT: UZBEKISTAN GSP INTERIM DEMARCHE REQUEST


1. This is an action request; Please see paragraph 7.


2. Summary. As part of the USG's review of Uzbekistan's
eligibility for benefits under the Generalized System of
Preferences (GSP),Post is requested to meet Government of
Uzbekistan officials at the highest appropriate level to call
attention to the need to address the issue of child labor in
the cotton industry and to request that Uzbekistan invite the
International Labour Organization (ILO) to undertake a
mission to assess child labor in the 2009 cotton harvest.
Post is further requested to stress that the invitation
should be made as early as possible to allow the ILO to plan
and execute its assessment. The USG expects to discuss the
progress of the ILO assessment and other steps taken by the
Government of Uzbekistan during the October Trade and
Investment Framework Agreement (TIFA). End Summary.

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BACKGROUND
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3. In 2008, Uzbekistan exported over USD 3 million in
products duty-free to the United States under the GSP
program. The USG is reviewing two petitions regarding
Uzbekistan under the GSP program. A 1999 petition from the
International Intellectual Property Alliance (IIPA) alleges
Uzbekistan has failed to protect intellectual property
rights. A 2007 petition form the International Labor Rights
Forum (ILRF) alleges Uzbekistan fails to protect
internationally recognized worker rights, in particular with
respect to child labor in the cotton industry. The GSP
program is designed to promote economic growth in developing
countries, and provides preferential duty-free entry for more
than 4,650 products from 131 designated beneficiary countries
and territories. The GSP program was launched in 1976 for a
10-year period and is renewed periodically, most recently in
2008, when it was reauthorized through 2009. Under the
mandatory GSP eligibility criteria the President shall not
designate a country as a GSP beneficiary if the country: 1)
"Has not taken or is not taking steps to afford
internationally recognized worker rights to workers in the
country...." or 2) "Has not implemented its commitments to
eliminate the worst forms of child labor."


4. The interagency GSP Subcommittee of the Trade Policy Staff
Committee (TPSC) reviews all accepted GSP petitions and
submits its recommendations to the TPSC policy-level
officials for decision. The GSP Subcommittee is chaired by
USTR and is comprised of representatives from State,
Treasury, Commerce, Labor, Agriculture, USAID, and USITC.
Based on a country's inaction or action, the Subcommittee may
recommend that the review remain open to continue to engage
with a country, be closed based on steps taken, or suspended
if little or no progress has been made. One of the aims of
the petition review process is to encourage action by the GSP
beneficiary government to address the issues identified in
the petition. The review process is not intended to move
directly to punitive action, such as suspension of GSP
benefits. The GSP Subcommittee makes every effort through
engagement with the beneficiary country, including demarche
requests, to resolve issues in a positive way. Host
governments should understand that, under the GSP statute,
failure to address issues of concern could lead to a loss of
GSP benefits.


5. In April 2007, the USG extended review of the petition by
IIPA, and included GSP-related instructions to Post in the
2007 Special 301 demarche requesting Uzbekistan take the step
of removing its reservation to the Berne Convention as an
interim step. Uzbekistan has subsequently made clear that it
does not intend to lift this reservation. The ILRF, in the
petition to review worker rights, alleged that Uzbekistan has
failed to protect workers from compulsory labor. The ILRF
also criticized Uzbekistan for failing to eliminate the worst
forms of child labor. In April 2008, the USG extended review
of the petitions for another year, and included GSP-related
instructions to Post to underscore the continued USG review
of the petitions.


6. The USG in previous demarches suggested several specific
steps that, if taken by Uzbekistan, would help to address USG
concerns over worker rights and the adequate protection of
intellectual property rights. The GSP Subcommittee is
concerned that little progress has been made in the suggested
areas. In particular, the USG has emphasized the need to
draw on assistance and advice from the International Labour
Organization (ILO). The Subcommittee believes that a mission
from the ILO to assess the level of forced child labor in the
harvest could assist Uzbekistan in addressing the worker
rights concerns raised in the ILRF's petition.

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ACTION REQUEST
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7. At the earliest convenience, Post is requested to deliver
the following talking points to Uzbekistan government
officials at the highest appropriate level:

-- As you are aware, the GSP statute provides factors that
the President must take into account in designating a country
as eligible for the GSP. These factors include the extent to
which the country is providing adequate and effective
protection of intellectual property rights and whether or not
the country has taken or is taking steps to afford workers
internationally recognized worker rights.

-- GSP preferences are conditioned on mandatory statutory
requirements, and forced child labor is defined under the law
as a particularly egregious violation of rights. Under the
GSP statute, a country that has not or is not taking steps to
afford workers internationally recognized worker rights shall
not be designated as eligible for GSP benefits.

-- In 2007, a petition from the International Labor Rights
Forum (ILRF) was submitted to the USG that alleges
Uzbekistan's failure to protect internationally recognized
worker rights, in particular with respect to child labor in
the cotton industry. There is another petition, dating to
1999, which alleges Uzbekistan's failure to protect
intellectual property rights adequately. The USG is
obligated by law to respond to such petitions.

-- We urge your government to demonstrate progress in
addressing outstanding concerns raised by both petitions
regarding Uzbekistan's eligibility of GSP benefits. We note
that your government has begun engagement with appropriate UN
agencies on the child labor issue and has expressed interest
in raising its level of expertise on Intellectual Property
Rights protection. Given that fall harvest time is nearing,
the most immediate concern is the mobilization of child labor
for this fall's cotton harvest.

-- As part of our continued review of the petitions, we
urgently request your government invite the International
Labour Organization to undertake a mission to assess child
labor in the 2009 cotton harvest.

-- This invitation should be made as quickly as possible and
with enough notice to ensure the ILO can plan and execute an
assessment in the 2009 harvest season.

-- The invitation and execution of the ILO assessment would
be seen by the GSP Subcommittee as a favorable step towards
the affirmation of Uzbekistan's GSP benefit eligibility.

-- We look forward to discussing with Uzbekistan the progress
of the ILO assessment of the 2009 cotton harvest,
intellectual property rights, an the other issues raised in
the petitions, during the Trade and Investment Framework
Agreement (TIFA) meeting with Uzbekistan in early October

2009.

-- We must inform the GSP Subcommittee of progress made by
September 1, 2009.

-- In concluding the 2008 GSP Country Practice review, the
GSP Subcommittee will also be reviewing Uzbekistan's efforts
on this and other actions to combat child labor.

-- We will announce the outcome of the pending GSP Review of
Country Practices for Uzbekistan at a later date.


8. Post is requested to report the results of the effort by
cable or email immediately following delivery.


9. Post is also requested to follow-up on this request of
Uzbekistan and report on the status of the invitation and/or
progress of the assessment mission by September 1, 2009, to
the GSP Subcommittee.
CLINTON