USTR - USTR to Examine Operation of GSP Program
Office of the United States Trade Representative

 

USTR to Examine Operation of GSP Program
10/06/2005



WASHINGTON – U.S. Trade Representative Rob Portman today announced that USTR will begin an examination of the Generalized System of Preferences (GSP) program to determine if there are changes that could be made in the program’s operation.  Specifically, the USTR will seek to increase the program’s effectiveness in helping more countries benefit from the program and use trade in support of their development. 

The GSP program allows products from beneficiary countries to enter the United States duty free.  Legislation authorizing the GSP program expires on December 31, 2006.  In advance of Congressional consideration of re-authorization of the GSP program, there will be a public hearing on November 3, 2005, and public comments will be accepted through November 14, 2005.    

“We are looking to identify ways in which we can improve the operation of the GSP program to ensure that it fulfills its purpose of helping developing countries use trade to aid their development,” said Portman.  "Finding ways to ensure that countries share more equally in the benefits is a major objective."

Comments are being sought on the following issues: 

(1)  whether some beneficiary countries are sufficiently competitive with respect to trade in eligible products and have expanded exports to the extent that they should no longer be designated as GSP beneficiaries;  

(2) whether there are modifications to the operation of the GSP program that would enhance the program’s effectiveness in helping beneficiary countries increase their participation in the program and use trade in support of their development; and 

(3) the period for which the Congress should reauthorize the GSP program.

Background

The GSP program was created by Congress in the Trade Act of 1974.  Under the program, 139 beneficiary countries export approximately 5,000 different products duty-free to the United States.   In 2004, the top ten GSP beneficiary country exporters, by trade volume of non-petroleum GSP products, were India, Brazil, Thailand, Indonesia, Turkey, Philippines, South Africa, Venezuela, Argentina, and Russia.  These countries exported $14.6 billion in goods to the United States -- nearly 70 percent of the products receiving GSP duty-free benefits.  The remaining 129 GSP beneficiary countries exported $8.1 billion in goods duty-free into the United States under the GSP program.

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