USTR to Review Whether 13 Countries Should Remain Eligible for GSP Benefits
The U.S. Trade Representative (USTR) today announced it will begin the second phase of its review of the Generalized System of Preferences (GSP) program, which provides duty-free treatment for goods from 133 beneficiary developing countries. The USTR will review whether to limit, suspend, or withdraw the eligibility of the following GSP beneficiaries that have been deemed by the World Bank to be "upper-middle-inccome" economies: Argentina, Brazil, Croatia, India, Indonesia, Kazakhstan, Philippines, Romania, Russia, South Africa, Thailand, Turkey and Venezuela. In addition, the USTR will also review the 83 current waivers to the GSP program’s competitive need limitations (CNL). CNL waivers allow certain products from specific countries to enter duty-free into the U.S. without being subject to GSP statutory market share and annual import caps.
In announcing these reviews, USTR Schwab said:
"One of the concerns that Congress has raised is that GSP benefits go largely to a few countries, while many developing countries are not trading much under the program. We want to ensure that we are operating the program as Congress intended. The review I am announcing today, the first in twenty years, will help make certain that we are administering the program consistent with statutory criteria. Our goal is for more countries to benefit from the program and use trade in support of their economic development."The USTR's GSP Subcommittee is seeking public comments on these issues. The USTR will publish a notice in tomorrow Federal Register announcing that public comments on these two GSP issues are due by September 5, 2006.
As we previously reported, U.S. importers that purchase and import products covered by the Generalized System of Preferences (GSP) should closely monitor the status of the reauthorization of the GSP program, which is set to expire on December 31, 2006. While Congress has passed legislation extending the GSP program's statutory authority on a retroactive basis each time it has come up for renewal, today's USTR annoucement indicates that this year will be different. House Ways and Means Committee Chairman Bill Thomas (R-CA) and Senate Finance Committee chairman Charles Grassley (R-IA) have both suggested that Congress should let GSP's statutory authority lapse. Even if GSP is renewed, Congress will likely require significant changes to the program. Stay tuned.
Tuesday Update: Yesterday's GSP announcement is the lead story in the business section of today's Washington Times. The story notes that the:
"[Bush] administration's review comes as some lawmakers look to punish governments that opposed U.S. policies during World Trade Organization talks -- especially a group of middle-income nations led by Brazil and India -- by ending their preferences entirely."
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