Lithium carbonates are one of the primary raw materials needed to manufacture next-generation lithium-ion (Li-ion) batteries used in electric and hybrid-electric cars.  Light-weight but power-dense, Li-ion batteries store more energy than regular batteries and allow electric and hybrid cars to go further between charges.

As noted in this recent article in the Washington Post, South America holds some of the worlds largest reserves of lithium carbonates.  Argentina alone supplied nearly 80 percent of all US imports of lithium carbonates  in the first 11 months of 2010.

What does this have to do with GSP?  Every penny’s worth of the lithium carbonates imported from Argentina through November 2010 entered duty-free under GSP.  More than $117 million worth of lithium carbonates have come in duty free under GSP since 2007, saving domestic manufacturers like FMC Lithium in Bessemer City, NC more than $4.3 million.

GSP helps American companies compete against producers of finished lithium batteries in Japan and China, the two leading foreign suppliers in 2010.  Allowing GSP to expire raises the costs for domestic manufacturers at a time when companies are desperately trying to decrease the costs for these new technologies.

GSP’s impact on developing countries is often cited as a reason to extend the program, but imports of lithium carbonates show that trade preferences like GSP are equally important for American manufacturers to compete in the global economy.