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GSP Renewal Around the Corner?
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October 12, 2013

Posted By Cindy Squires, Wednesday, August 6, 2014
As I write this, fall has begun without Congress renewing the GSP program.  The U.S. Generalized System of Preferences (GSP) promotes economic growth in the developing world by providing preferential duty-free entry for up to 5,000 products when imported from one of 127 designated beneficiary countries and territories. U.S. businesses imported $19.9 billion worth of products under the GSP program in 2012 -- many of which were inputs for U.S. manufacturers.  Unfortunately, Congress did not renew the program before it expired on July 31, 2013, forcing importers and exporters to adjust to the increased tariffs.    

IWPA has been working as a member of the Renew GSP Coalition to press Congress to renew the program.  In addition, twenty countries have formed the Alliance of GSP Countries (A-GSPC) to advocate for GSP renewal.   Countries that make up the alliance include: Algeria, Bangladesh, Brazil, Ecuador, Egypt, Fiji, Georgia, Indonesia, The Republic of Macedonia, Moldova, Mongolia, Nepal, Pakistan, Philippines, Sri Lanka, Thailand, Tunisia, Ukraine, Uruguay, and Yemen.

The Obama Administration supports GSP extension.  However, Senator Coburn (R-OK) put a hold on the bill stopping its passage.  Before Coburn’s action, it was expected that Congress would pass an extension of the program and work to reform it in the coming year.  Coburn is a supporter of the GSP program, but objects to how the costs of the program have been offset in the legislation.  

Sadly this isn’t the first time Congress has let this important program expire.  Congress when renewing the program typically will also provide for it to be retroactive, which is a good thing.  Unfortunately, Congress also tends to think that failure to renew on time does no lasting economic harm, which certainly underestimates the frustration of companies that use the program and need to know how to price their products.  

When Congress extended the program in the past, it applied the duty-free treatment to GSP-eligible products retroactively, allowing importers to seek refunds of duties paid.  However, retroactivity is not guaranteed, so we won’t know until Congress renews the program if it will also make it retroactive.

I encourage you to take a moment to reach out to your Congressional representatives to let them know you care about GSP renewal.  The Renew GSP Coalition has made it easy for you on its website.  

According to a 2005 U.S. Chamber of Commerce study, over 80,000 American jobs are associated with moving GSP imports from the docks to farmers, manufacturers, and retail shelves.  IWPA will continue to work for GSP renewal.  For late breaking news on the GSP program be sure to join the IWPA LinkedIN Group and follow the coalition’s twitter feed @RenewGSPToday.   

Also in case you were wondering, if you import into the U.S. from African nations, GSP-eligible imports from beneficiary countries of the African Growth and Opportunity Act (AGOA) will continue to be eligible for duty-free entry, despite the lapse in GSP authorization.  

A closing note, we have been busy preparing an exciting program for the next IWPA Convention in St. Petersburg, Florida.  Be sure to save the date:  March 5-7, 2014.  You can count on GSP renewal to be on the agenda.  

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