TRALAC - Trade Law Centre

GSP changes leave preferences intact for AGOA beneficiaries

Friday, 08 July 2016 Published: | Mike Godfrey

Source: TAX-NEWS.COM

"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

Federal Register - South Africa GSP Review dates

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...

19 November, 2019
Presidential Proclamation to take certain actions under the AGOA and for other purposes

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...

23 December, 2017
USTR announces new enforcement priorities for GSP

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...

24 October, 2017