Generalized System of Preferences (GSP): Overview and issues for Congress

Author
Congressional Research Service
Organisation
CRS
Publication Date
07 January 2021

The U.S. Generalized System of Preferences (GSP) program provides nonreciprocal, duty-free tariff treatment to certain products imported to the United States from designated beneficiary developing countries (BDCs). Congress first authorized the U.S. program in Title V of the Trade Act of 1974. The European Union and other developed countries have implemented similar programs since the 1970s. Most recently, Congress extended the U.S. GSP program in Division M, Title V of the Consolidated Appropriations Act, 2018 (P.L. 115-141). This act extended the GSP program until December 31, 2020, as well as retroactively renewing it for the time period between December 31, 2017 (the previous expiration date) and April 22, 2018. The program expired on December 31, 2020, before Congress passed legislation to reauthorize it.

This report examines, first, recent legislative developments, along with a brief history, economic rationale, and legal background leading to the establishment of GSP. Second, the report describes U.S. GSP implementation. Third, the report briefly analyzes the U.S. program’s effectiveness and stakeholders’ views, and discusses possible options for Congress.

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