President Barack Obama on Oct. 3 officially removed Russia from the list of countries that benefit from the Generalized System of Preferences (GSP). Russia has economically advanced and developed its trade competitiveness to a point that no longer justifies its inclusion in the preference program, said Obama. The Trade Act of 1974 will be modified and the Harmonized Tariff Schedule will be amended to reflect the removal of Russia, Obama said in the statement. Obama told Congress in May that he intended to remove Russia from the program (see 14050805). The termination is effective Oct. 3. The GSP program has been expired for more than a year.
The European Union issued the following trade-related releases Sept. 24-25 (notices of most significance will be given separate headlines):
U.S. companies are facing mounting costs and sometimes irreversible losses as the Generalized System of Preferences remains expired, but there is still no clear path forward on renewal of the program, said Coalition for GSP Vice President Dan Anthony on Sept. 16. Lawmakers and analysts are losing touch with the ill-effects of expiration as the “action-forcing event” of expiration has long passed, he said. U.S. companies pay nearly $2 million daily in higher import duties, and since expiration, companies have paid roughly $700 million in duties on goods that GSP allows to enter the U.S. duty-free, according to a study released on Sept. 16 by the coalition (here).
A court challenge may be brewing on CBP’s controversial decision to prohibit the filing of protests to claim duty preferences under several free trade agreements, say customs lawyers. A lawsuit could soon be brought by an importer denied the ability to claim preferences by the new policy, although that would require the importer have enough money at stake to justify filing suit, said several lawyers. Another lawyer proposes that importers and trade groups band together to challenge the policy in its entirety as an illegally-issued regulation. Pressure against the change could also come from countries with agreements that are affected by the change, as well as smaller importers that make their voices heard at CBP headquarters.
CBP posted a document to its website that provides side-by-side comparisons of 20 U.S. free trade agreements and preferential trade programs. This updated version removes references to use of protests under 19 USC 1514 for making preference claims under agreements not covered by statute in 19 USC 1520(d). CBP recently advised the ports that importers will only be able to claim duty preference after importation through post summary corrections or post entry amendments for these FTAs (see 14081320).
Importers will no longer be able to use protests to claim duty preferences under free trade agreements and trade preference programs after liquidation, said CBP in a letter to ports dated Aug. 11. Instead, importers will only be able to claim duty preferences after importation through 1520(d) post-importation claims for some FTAs, and by filing post-summary corrections (PSCs) or post-entry amendments (PEAs) for all others, including preference programs like the African Growth and Opportunity Act (AGOA) and Generalized System of Preferences (GSP). CBP is making the policy change to comply with recent court decisions, it said.
The following lawsuits were filed at the Court of International Trade during the week of July 28 - Aug. 3:
The U.S. International Trade Commission released its annual report on the previous year's trade-related activities, it said in a press release (here). "The Year in Trade 2013” includes an overview of antidumping and countervailing duty, safeguard, intellectual property rights, and section 301 cases undertaken by the U.S. government in 2013. In addition, the report covers:
There is virtually no chance lawmakers will pass African Growth and Opportunity Act (AGOA) renewal legislation prior to the November mid-term elections, and the prospect of enactment during the lame duck session is also unclear, said House Ways and Means Subcommittee on Trade ranking member Charlie Rangel, D-N.Y., in an interview following a July 29 subcommittee hearing on the legislation. The measure will likely be a “minute” item on the legislative agenda following the elections, said Rangel, a proponent of the law, while emphasizing the significance of the law in preserving U.S.-sub-Saharan African trade.
The U.S. faces a critical opportunity in the coming days to determine how best to boost trade with Africa as the Obama administration prepares to host 50 African heads of state for the U.S.-Africa Leaders Summit from Aug. 4-6, said U.S. Trade Representative Michael Froman in remarks before the Brookings Institution on July 29. The House and Senate will also host hearings on the African Growth and Opportunity Act (AGOA) on July 29 and July 30 (see 14072537). Froman said the administration is collaborating with Congress to renew AGOA and the expired Generalized System of Preferences. AGOA, which entered into force in 2000, is due to expire at the end of fiscal year 2015 and many beneficiaries of the program are pushing for early renewal in order to preserve existing supply chains. “Since 2000, U.S. goods exports to sub-Saharan Africa increased fourfold, from $6 billion to $24 billion,” said Froman. “Last year, U.S. exports to sub-Saharan Africa supported nearly 120,000 jobs here in the United States. Given that Africa is home to the world’s fastest-growing middle class and six out of the top 10 fastest-growing economies in 2014, it’s easy to see why global companies like GE, Caterpillar, and Procter & Gamble increasingly view engaging with Africa not as a choice, but as a necessity.”