USTR Issues Second Notice on Whether to Change the GSP Program, Etc. (Considers Limiting Benefits for Top Countries, Etc.)
The Office of the U.S. Trade Representative (USTR) has previously issued a notice announcing that the Trade Policy Staff Committee (TPSC) was seeking public comments and scheduling a public meeting as part of its review on whether the operation of the Generalized System of Preferences (GSP) program should be changed so that the program's benefits are focused in a different way.
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(See ITT's Online Archives or 10/07/05 news, 05100705, for BP summary of USTR's previous request for comments.)
GSP Program to Expire December 31, 2006 Unless Extended
According to the USTR, legislation authorizing the GSP program expires on December 31, 20061. As Congress considers re-authorization of the GSP program, the USTR has previously stated that the TPSC was reviewing whether the Administration's operation of the program should be changed.
Additional Comments Requested on Whether GSP Should be Limited for Top Beneficiaries, Etc.
The USTR has now issued a second notice stating that based on information received so far, it has decided to initiate a further review and request additional comments by September 5, 2006 to determine whether:
to limit, suspend, or withdraw GSP eligibility for 13 top beneficiaries, including Brazil and India - whether to limit, suspend, or withdraw the eligibility of those GSP beneficiary countries for which the total value of U.S. imports under GSP exceeded $100 million in 2005; and (a) which the World Bank classified as an upper-middle-income economy in 2005; or (b) that accounted for more than 0.25 percent of world goods exports in 2005, as reported by the World Trade Organization.
As a result, the TPSC is seeking comments on the eligibility status of the following GSP beneficiary countries: Argentina, Brazil, Croatia, India, Indonesia, Kazakhstan, Philippines, Romania, Russia, South Africa, Thailand, Turkey, and Venezuela.
(The GSP statute authorizes the President to withdraw, suspend, or limit the application of duty-free treatment with respect to any country based on statutory eligibility criteria (19 USC 2462(d).)
existing CNL waivers are no longer warranted - whether any of the 83 existing competitive needs limitation (CNL) waivers are no longer warranted due to changed circumstances.
(Under the GSP statute, imports of a specific product from a beneficiary country are limited by either a market share cap or annual import level, unless the President grants a waiver. The statute also authorizes the President to terminate a CNL waiver if there is a determination that the waiver is no longer warranted due to changed circumstances.
According to the USTR, 19 GSP beneficiaries (Argentina, Bosnia-Herzegovina, Brazil, Colombia, Croatia, India, Indonesia, Ivory Coast, Kazakhstan, Macedonia, Peru, the Philippines, Romania, Russia, South Africa, Thailand, Turkey, Venezuela, and Zimbabwe) currently have CNL waivers.)
Senate Finance Committee Chair Has Said He'll Likely Oppose GSP Extension or Tighten its Eligibility Requirements
As part of his opening statement at the Senate Finance Committee hearing on the nomination of Susan Schwab as USTR, Chairman Chuck Grassley expressed his frustration that Brazil and India derive great benefits under the GSP program, yet are two of the countries most responsible for holding up the Doha negotiations.
Grassley noted that he will likely oppose the extension of the GSP program, which expires at the end of 2006. Grassley also stated that if GSP is extended, he'll work to see that the eligibility requirements are tightened, so some countries can expect to be removed from the program. Grassley emphasized that any extension of GSP will not be a continuation of the status quo and that he hoped that with the GSP termination looming, Brazil, India, and other beneficiary countries will work harder to see that the Doha negotiations are concluded successfully.
1Subscribers should note that only the "standard" GSP program (i.e, A, A*, and A) for GSP countries other than those listed as African Growth and Opportunity Act (AGOA) beneficiary countries, is scheduled to expire on December 31, 2006.
For AGOA beneficiary countries, both the standard GSP program (i.e., A, A*, and A) and the AGOA-GSP program (i.e., D) are not scheduled to expire until September 30, 2015. (See ITT's Online Archives or 07/14/04 news, 04071405, for BP summary of the enactment of AGOA III, which set this September 30, 2015 expiration date.)
(See ITT's Online Archives or 08/09/02 news, 02080910, for BP summary of the retroactive reinstatement of the standard GSP program for non-AGOA beneficiary countries through December 31, 2006.)
- comments must be received by September 5, 2006
USTR contact - GSP Subcommittee (202) 395-6971
USTR notice (FR Pub 08/08/06) available at http://a257.g.akamaitech.net/7/257/2422/01jan20061800/edocket.access.gpo.gov/2006/pdf/E6-12870.pdf.
USTR press release (dated 08/07/06) available at http://www.ustr.gov/Document_Library/Press_Releases/2006/August/Administration_to_Review_Whether_to_Continue_Trade_Benefits_under_the_GSP_Program.html.
Grassley statement (dated 05/16/06) available at http://www.senate.gov/finance/hearings/statements/051606cg.pdf.