GSP changes leave preferences intact for AGOA beneficiaries

GSP changes leave preferences intact for AGOA beneficiaries
Published
Friday, 08 July 2016 ~ Mike Godfrey

"Deep disappointment" has been expressed over the exclusion of travel goods produced in the Philippines, Thailand, Pakistan, Indonesia, and Sri Lanka from duty-free status under the US Generalized System of Preferences (GSP) program, following the US Administration's recent annual review.

Under the GSP program, approximately 5,000 products from 122 beneficiary developing countries and territories, including 43 least developed countries, are eligible for duty-free treatment when exported to the United States.

Based on the review, which considered various issues and petitions related to the eligibility of products under the GSP program, new duty-free status has been added for 28 travel goods (including luggage, backpacks, handbags, and wallets).

However, a July 5 letter to the United States Trade Representative (USTR) from the American Apparel & Footwear Association, the Outdoor Industry Association, the Sports & Fitness Industry Association, and the Travel Goods Association noted that duty-free status for the travel goods has been limited to African Growth and Opportunity Act (AGOA) states and Least Developed Beneficiary Developing Countries (LDBDC).

"Deferring the decision for other GSP-eligible countries, which is not a decision, without any indication of the timeline for a final decision, further harms US businesses and the development of other GSP beneficiary countries by creating confusion and uncertainty," the letter said.

It added that the "complex" backpacks and sports bags currently being made for US businesses "will not be made in AGOA or LDBDC countries in the near future as they continue to develop production, capabilities, and capacity. … More importantly, refusal to decide on the eligibility for other GSP beneficiary countries will negate any significant development gains that could have been achieved through the expansion of GSP eligibility to a new set of products."

The associations pointed out that, "in 2015, the US imported 2.1bn [travel goods] items; of that amount 85 percent were from China, 0.01 percent from AGOA countries, and 1.3 percent from all least developed countries, including AGOA. The failure to make a decision regarding other GSP-eligible countries … leaves companies with few options but to source from the super-competitive China."

They urged the USTR, "in the strongest possible terms, to make all 28 travel good items eligible for the benefits of GSP for all beneficiary countries as soon as possible to resolve the significant commercial uncertainty and policy incoherence that the Administration's partial decision has created."

View related news articles

AGOA Coalition warns Congress: Duty-free imports sought by US apparel makers would vitiate Africa trade

AGOA Action Coalition letter to Congress on GSP modernization provisions The following letter was sent by the Agoa Action Coalition to the chairman of the U.S. House Ways and Means Subcommittee on Trade Earl Blumenauer (Democrat-Oregon), as well as the chairman of the full committee, Richard Neal (Democrat-Massachusetts) and ranking Committee member Kevin Brady (Republican-Texas), and ranking Trade Subcommittee member Vern Buchanan...

03 September 2020

Federal Register - South Africa GSP Review dates

The Office of the United States Trade Representative (USTR) is announcing a hearing for the GSP country practice reviews of Azerbaijan, Ecuador, Georgia, Indonesia, Kazakhstan, Thailand, South Africa, and Uzbekistan, and the country designation review of Laos. These reviews will focus on whether: (1) Azerbaijan, Georgia, Kazakhstan, and Uzbekistan are meeting the GSP eligibility criterion requiring that a GSP beneficiary country afford...

19 November 2019

SA business organisation asks president to delay enactment of two Bills to ensure continued US trade benefits

Business organisation Sakeliga has requested President Cyril Ramaphosa to delay the enactment of two Bills of Parliament, which it says could potentially jeopardise 40% of South Africa’s exports to the US. The relevant Bills are the Copyright Amendment Bill (B13B-2017) and the Performer’s Protection Bill (B24B-2016). Sakeliga’s open letter on Monday follows an announcement made last week by the Office of the US Trade...

28 October 2019

R35 billion in South African exports to the USA are at stake in a 'review' just triggered by SA's copyright reform efforts

South African exports to the United States worth some R35 billion last year will be at stake when the Office of the United States Trade Representative launches a review of SA's eligibility for duty-free imports under the US system known as the Generalized System of Preferences, or GSP. The US federal government announced plans for the review on Friday. The exports threatened include – but go beyond – exports to...

27 October 2019

US announces a review of South Africa's place in its biggest preferential trade scheme (GSP)

The United States plans to review South Africa's eligibility to participate in its Generalized System of Preferences (GSP), the largest and oldest American scheme to allow duty-free imports from less developed countries. The South African review is "based on IP [intellectual property] protection and enforcement concerns", the Office of the United States Trade Representative said in an announcement on Friday. [See...

26 October 2019

Presidential Proclamation to take certain actions under the AGOA and for other purposes

In Proclamation 9223 of December 23, 2014, President Obama determined that the Republic of The Gambia (“The Gambia”) was not making continual progress in meeting the requirements described in section 506A(a)(1) of the Trade Act of 1974, as amended (the “Trade Act”) (19 U.S.C. 2466a(a)), as added by section 111(a) of the African Growth and Opportunity Act (the “AGOA”). Thus, pursuant to section 506A(a)(3) of the Trade Act (19 U.S.C....

23 December 2017

USTR announces new enforcement priorities for GSP

US Trade Representative Robert Lighthizer today announced a new effort to ensure beneficiary countries are meeting the eligibility criteria of the Generalized System of Preferences (GSP) trade preference program.  This new effort includes a heightened focus on concluding outstanding GSP cases and a new interagency process to assess beneficiary country eligibility. This interagency process complements the current petition receipt and...

24 October 2017