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USTR Announces Major Expansion of Trade Preferences for Least Developed and African Countries

Aiming to Promote Poverty Alleviation and Economic Growth in Poorest Countries

Washington, D.C. – The Office of the United States Trade Representative announced today the outcome of the Obama Administration’s Annual Product Review under the Generalized System of Preferences (GSP) program.

This review adds new duty-free status for travel goods (including luggage, backpacks, handbags, and wallets) for Least Developed Beneficiary Developing Countries (LDBDCs) and African Growth and Opportunity Act (AGOA) countries. 

GSP is a 40-year-old trade preference program under which the United States provides duty-free treatment to many imports from beneficiary developing countries and additional products for LDBDCs.

“Trade preference programs such as GSP and AGOA can make a powerful contribution to lifting people out of poverty and supporting growth in some of the poorest countries in the world, while also reducing costs to American consumers and businesses,” said U.S. Trade Representative Michael Froman.  “We have used these programs to give beneficiary countries a vital leg up vis-à-vis more advanced competitors.”

Based on the Administration’s review of various issues and petitions related to eligibility of products under the GSP program, President Obama also made several other determinations today affecting product coverage under GSP, including the following:

  •          The removal of products from specific GSP countries where the country is sufficiently competitive and so as to no longer need tariff preferences to compete in the U.S. market, including fluorescent brightening agents and PET resin from India;
     
  •          The granting of competitive need limitation (CNL) waivers, ensuring continued GSP duty-free benefits, for 114 products from 15 countries.

The full results of the GSP 2015/2016 Annual Review are available here and will also be announced in the Federal Register.

Background

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,  Nearly 1,500 of these products are reserved for duty-free treatment for LDBDCs only. In 2015, the total value of imports that entered the United States duty-free under GSP was $17.4 billion.

The Trade Preference Extension Act (TPEA) of 2015 gave the President, for the first time, the authority to add certain travel and luggage goods products to GSP, subject to the regular, petition-driven review process.  The 27 HTS subheadings cited in the TPEA included luggage, handbags, backpacks, and pocket goods (such as wallets). 

As part of the GSP 2015/2016 Annual Review, an interagency committee led by USTR (the GSP Subcommittee of the Trade Policy Staff Committee) received and considered requests seeking: 1) to add or remove products from the list of those eligible for duty-free treatment under GSP; 2) to waive product exclusions for certain countries based on statutory requirements related to competitiveness (CNLs); and 3) to withdraw or limit a country’s eligibility for GSP trade benefits based on statutory eligibility criteria, including whether a country is taking steps to afford internationally recognized standards for worker rights, whether it provides important investor protections including enforcement of arbitral awards, and the extent to which a country adequately and effectively protects intellectual property rights.  For those petitions accepted for review, the USTR-led committee holds public hearings, solicits public comments, and – in the case of product petitions – reviews analyses prepared by the U.S. International Trade Commission of the economic impact of product eligibility decisions on domestic industries and consumers.  Any change to the lists of products or countries eligible for GSP benefits requires a presidential determination. 

For more information on the GSP program, visit the GSP page on the USTR website here