The Generalized System of Preferences [GSP] scheme is a voluntary trade measure implemented by developed countries that provide an advantageous, or “preferential”, tariff treatment to imports from developing countries.
Different national GSP schemes were introduced following a resolution adopted at the second session of the United Nations Conference on Trade and Development [UNCTAD] in 1968.
The scheme is expected to contribute to developing countries’ export growth particularly in the manufacturing sector.
Five decades since its inception, the GSP stands at a crossroads. The effectiveness of tariff incentives as a tool to foster exports has eroded over time as trade liberalization processes proceed at multilateral, regional and unilateral levels, and as the relevance of tariffs to overall trade costs declines.
The question arises as to whether the relevance and effectiveness of tariff preferences remain valid today.
Focusing on the GSP schemes of the Quad economies [Canada, European Union, Japan, and the United States of America], which accounted for about 50 per cent of global imports on average in the period between 2004 and 2018, the study provides an objective assessment of tariff advantages offered under the GSP by quantifying the economic “value” of preferential treatment and the obstacles to the realization of its full potential.
The GSP program provides for the duty-free treatment of designated articles when imported from beneficiary developing countries. The GSP program is authorized by Title V of the Trade Act of 1974, as amended [Trade Act] [19 U.S.C. 2461 et seq.], and is implemented in accordance with Executive Order 11888 of November 24, 1975, as modified by subsequent Executive Orders and Presidential Proclamations.
Today in Brazil, it is 3.278 products in duty free zone [USA-BR]. To be considered in the 2017/2018 Annual GSP Review, United States Trade Representative [USTR] must receive your petition by Monday, April 16, 2018 at midnight EST. This is the deadline for petitions to modify the GSP status of GSP beneficiary developing countries because of country practices; petitions requesting waivers of CNLs; petitions on GSP product eligibility additions and removals; petitions to deny de minimis waivers; or petitions to redesignate an excluded product.
The 2017 GSP Annual Product Review: The Interim Import Statistics Relating to Competitive Need Limitations is posted on the USTR website at //ustr.gov/issue-areas/ preference-programs/generalized- system-preferences-gsp/current-reviews/ gsp-2017-review. These statistics include three lists:
List I : identifies GSP-eligible articles from beneficiary developing countries [BDCs] that exceeded a CNL by having been imported into the United States in 2017 in excess of $180 million, or in a quantity equal to or greater than 50 percent of the total U.S. import value for this product in 2017. Unless the President grants a waiver in response to a petition filed by an interested party, these products will be removed from GSP eligibility on November 1, 2018.
List II : identifies GSP-eligible articles from BDCs that are above the 50 percent CNL but that are eligible for a de minimis waiver. Petitions are not necessary for these products to be considered for de minimis waivers. As described below, petitions only will be accepted in opposition to potential de minimis waivers for these products.
List III : identifies GSP-eligible articles from certain BDCs that currently are not receiving GSP duty-free treatment but may be considered for GSP redesignation in response to a petition filed by an interested party. Note that products exceeding 50 percent of imports may be considered for redesignation if there was no U.S. production in the last three years.
If your company are in one of this 3 situations you will have until 16 April 2018 to send the petition to USTR.
Goods that are either wholly the growth, product, or manufacture of, or is a new or different article of commerce that has been grown, produced, or manufactured in, a beneficiary developing country may qualify for duty-free entry under GSP. All third-country materials must have undergone a substantial transformation with at least 35 percent of the good’s appraised value be added in the beneficiary country. The good must also be “imported directly” from the GSP eligible country. For additional eligibility criteria, see 19 CFR 10.171 to 10.178 at //www.ecfr.gov/cgi-bin/text-idx?SID=31017316ea7c410ae832bd10ed56f584&mc=true&node=sg19.1.10_1153.sg31&rgn=div7.
GSP Special Program Indicator [SPI]: “A,” “A+,” and “A*”
Eligible tariff items are identified by the symbols “A”, “A*” or “A+” in the “Special” sub-column of the HTSUS. Entries claiming GSP benefits must add SPI “A” as prefix to the tariff number.
- The symbol “A” indicates that all GSP countries are eligible [HTSUS General Note 4[a]]
- The symbol “A*” indicates that certain GSP countries are ineligible [HTSUS General Note 4[d]]
- The symbol “A+” indicates approximately 1,500 additional tariff items for which only the least developed beneficiary developing countries are eligible [HTSUS General Note 4[b]]
Competitive Need Limitations
The GSP program imposes quantitative ceilings called Competitive Need Limitations [CNLs] on GSP benefits for all tariff items and beneficiary developing countries. Under certain circumstances, these ceilings may be waived. For more information, see USTR’s GSP Guidebook at //ustr.gov/sites/default/files/gsp/GSPGuidebook_0.pdf.
Expiration of GSP SPI “A,” “A+,” and “A*”
On December 31, 2020, the GSP SPIs [“A,” “A+,” and “A*”] expired and is currently pending Congressional action to pass legislation for the program’s renewal. Effective January 1, 2021 at 12:00am EST, GSP eligible goods entered or withdrawn from warehouse need to pay “General” [column 1] duty rates until further notice.
GSP Entry Summaries and Retroactive Refund
Importers are encouraged to continue flagging GSP-eligible importations with SPI “A” and pay normal trade relations [column 1] duty rates during the lapse. Importers may not file SPI “A” without paying duties. In the event that GSP is renewed with a retroactive refund clause, CBP will be enabled to automate the duty refund process for entries flagged with the SPI “A” and no further action will be required by the filer to initiate the refund process.
Post Summary Correction [PSC] GSP Claims for Importations prior to Expiration
CBP will continue to allow post-importation GSP claims made via PSC and protest [19 USC 1514, 19 CFR 174] for importations made prior to GSP expiration.
CBP will not allow post-importation GSP claims made via PSC or protest for importations made after GSP expiration.
Goods Subject to Section 232 [aluminum and steel]
Trade preference may be claimed for all preference programs with the exception of GSP and the African Growth and Opportunity Act [AGOA]. Importers making a trade preference claim under a program other than GSP or AGOA may continue to receive the preferential duty rate and any manufacturing processing fee exemption that may apply in accordance with 19 CFR 24.23[c]. GSP and AGOA-eligible goods that are subject to Section 232 duties or quotas may not receive GSP or AGOA duty preference in accordance with 19 USC 2463[b][2]. Section 232 duties must be paid on imports subject to Section 232 even if trade preferences apply.