TRALAC - Trade Law Centre

US GSP Set to Expire for Some Countries

Monday, 04 December 2006

Source: FedEx Trade Networks

Unless there is a legislative extension by Congress, the Generalized System of Preferences (GSP) program is set to expire on Dec. 31, 2006, for countries such as Bangladesh, Brazil, India, Philippines, Sri Lanka, and many others. African Growth and Opportunity Act (AGOA) beneficiary countries will not be impacted by the expiration of GSP as the GSP program for AGOA beneficiary countries such as Kenya, Nigeria, Senegal, and South Africa will not expire until Sept. 30, 2015. Romania and Bulgaria will no longer be eligible to be GSP beneficiary countries upon joining the European Union on Jan. 1, 2007, regardless of whether or not the GSP program is re-authorized.

The goal of the GSP program is to promote economic growth in developing countries by providing preferential duty-free entry into the U.S. for certain products from designated beneficiary countries and territories. First instituted on Jan. 1, 1976, the program has been re-authorized by Congress many times since that date.

In August 2006, the Office of the U.S. Trade Representative (USTR) requested public comments on changing the Administration’s operation of the Generalized System of Preferences (GSP) program in two main areas: (1) whether to limit, suspend or withdraw GSP eligibility for 13 top beneficiary countries, and (2) whether to terminate any of the current Competitive Need Limitation (CNL) waivers due to changed circumstances. USTR reported that it had received over 800 responses by the Sept. 5 deadline, and they are available for online viewing.

Although time is rapidly running out, there is still a chance that the House of Representatives may pass a GSP extension bill before the end of 2006. If so, the bill would then be sent to the Senate.

Similar pieces of trade legislation that the Bush Administration would like Congress to pass are the reauthorization of the Andean Trade Preferences Act (ATPA) duty free program for an additional two years and the extension of existing trade preferences for sub-Saharan African countries and Haiti.