President Barack Obama intends to remove Russia as a Generalized System of Preferences (GSP) beneficiary because the country can no longer be considered a developing economy, according to a letter submitted to Congress on May 7. The GSP program expired on July 31, 2013, and lawmakers continue to struggle to find a method of advancing the legislation (see 14032429). Obama did not mention the removal as a punitive measure.
Sub-Saharan African countries must develop independent, national strategies for the African Growth and Opportunity Act (AGOA) in order to fully embrace the trade preferences program, said Nicole Johnson, senior trade and investment officer at the State Department, at an Advancing Trade and Investment in Africa (ATIA) panel on May 1. Poor infrastructure continues to inhibit use of the program as well, said Johnson. “There’s broad agreement that AGOA has not lived up to its full potential. There are a number of eligible countries that have never taken advantage of the benefits and never exported a single product,” said Johnson. “Last year, two-thirds of [eligible countries] exported to the U.S. under AGOA and only 14 of them exported more than $10 million worth of products. So there are still a sizeable number of countries that are not exporting at all under AGOA.”
The National Customs Brokers & Forwarders Association of America raised and donated more money for political donations through its Political Action Committee than ever before, said the group's in its 2013 report. While expectations remain low for legislative progress on issues of interest to the association, "there are signs that -- gradually -- change is on its way," it said. The group added 92 new members in 2013, up to a total of 896 members, said the NCBFAA.
U.S. and Bangladeshi officials held an inaugural trade forum on April 28 in accordance with the bilateral Trade and Investment Cooperation Forum Agreement, said the Office of the U.S. Trade Representative (USTR). The two sides vowed to work to improve labor conditions in Bangladesh in order to restore Generalized System of Preferences eligibility, said USTR. The U.S. aims to bolster its trade relationship with Bangladesh in the following areas, said USTR:
The Bangladeshi government must continue to improve labor rights protections through its Export Processing Zone law and other legislation in order to regain Generalized System of Preferences eligibility, said the Department of State, the Office of the U.S. Trade Representative, the U.S. Agency for International Development and the Department of Labor in an April 23 release. In accordance with an Action Plan outlined by the Obama administration in July 2013, Bangladesh must also increase inspector staff, publicly disclose inspector evaluation, protection free association of workers and improve labor conditions, said the joint statement. The Obama administration will make a preliminary determination in June on the reinstatement of Bangladesh into the GSP program, USTR said on April 22 (see 14042211).
The European Parliament published on April 22 its adoption of unilateral measures to eliminate or reduce tariffs on products originating in Ukraine. The measures are in accordance with the 2012 Deep and Comprehensive Free Trade Area agreement. The European Parliament determined it is necessary to expedite the entry into force of trade preferences in the agreement, in light of the recent security, political and economic destabilization in Ukraine, according to the European Parliament Official Journal.
The Obama administration will make a preliminary determination in June on the reinstatement of Bangladesh into the Generalized System of Preferences (GSP), the Office of the U.S. Trade Representative said on April 22. Although the Bangladeshi government is making gradual improvement to labor conditions in the country, progress is still insufficient, according to administration officials in February (see 14021125). Bangladesh provides almost $5 billion worth of goods to the U.S. on an annual basis, largely in the apparel sector. Those goods are not eligible in GSP for any beneficiary. Roughly 99 percent of U.S. imports from Bangladesh do not reap GSP benefits (see 13071613). A series of labor disasters in Bangladesh that claimed upwards of 1,000 lives prompted USTR to rescind Bangladesh’s GSP eligibility in July 2013. The GSP program has been expired since July 31, 2013 (see 14032429).
Senate Finance Committee Chairman Ron Wyden, D-Ore., pledged in the “days and weeks ahead” to work with committee lawmakers and stakeholders to craft an alternate version of Trade Promotion Authority (TPA), Wyden said in a speech hosted by the American Apparel and Footwear Association (AAFA) on April 9. The proposal would strengthen provisions on enforcement and congressional oversight, said Wyden.
The U.S. Trade Representative (USTR) and the private sector must immediately ratchet up pressure on Congress to draft an enhanced African Growth and Opportunity Act (AGOA), said industry executives recently in interviews and letters. AGOA expires in September 2015 after a 15-year run. Due to industry's need to make sourcing decisions roughly 9 to 12 months in advance, lawmakers must pass AGOA renewal before the end of 2014 to avoid negatively impacting investment decisions, said the industry officials.
Senate Finance Chairman Ron Wyden, D-Ore. is unlikely to allow for a renewal of the Generalized System of Preferences to be added on to an unrelated tax extender bill that has been discussed to be a potential vehicle for GSP renewal (see 14032429), said Jon Gold, vice president of supply chain and customs policy at the National Retail Federation. The tax bill is now being considered by the committee. "Sen. Wyden has said that he only wants to have germane amendments and germane bills as part of that package and he doesn't think trade is a germane amendment," said Gold, who spoke at a Coalition of New England Companies for Trade conference in Newport, R.I. on April 1. "So, it's unfortunate that GSP will not be a part of that, but we continue to push."