US to cancel Russia's preferential trade benefits

WASHINGTON - The Obama administration moved Wednesday to cut trade benefits to Russia under its GSP programme, a move the White House termed "appropriate" given Moscow's interference in Ukraine.

In a letter to Congress, President Barack Obama said he intends to withdraw Russia's privileges under the Generalized System of Preferences (GSP) programme, which aims to provide developing countries with preferential trade tariffs.

Russia is "sufficiently advanced in economic development" to no longer merit inclusion, Obama explained in the letter.

"Once Russia's eligibility is withdrawn... US imports of GSP-eligible goods from Russia will be subject to normal, non-preferential rates of duty," the White House said in a statement.

The move will take effect after Obama issues a presidential proclamation on it.

The White House announcement made no mention of the Ukraine crisis.

But it comes as Washington has warned it will increase economic sanctions on Russia because of its support for secessionist rebels in Ukraine.

Caitlin Hayden, spokeswoman for the National Security Council, told AFP that the GSP move was "not directly related" to Russia's actions in Ukraine.

But those actions "make it particularly appropriate to take this step now." The move also follows similar steps by the European Union and Canada to withdraw special trade privileges for Russia.