U.S. Generalized System of Preferences (GSP)

US Generalized System of Preferences

GSP Documents


Background

  • The U.S. Generalized System of Preferences (GSP) is a program providing free rates of duty for products from beneficiary developing countries to encourage their economic growth, beginning in 1976. More than 145 countries are eligible for this trade preference in over 4400 product items (except textile and apparel, footwear and other sensitive items such as steel, glass, etc.).
  • The original GSP program has expired and has been extended many times. The most recent program expiration was on December 31, 2017.

  • Annual Review

    As provided for under the U.S. GSP statute, each year the USTR (GSP subcommittee which consists only of officials from the current Administration) conducts an annual review between June 1 – April 30, to consider the addition, removal or restoration of eligibility for products and/or countries according to criteria of the GSP statute. Products may be added, removed or restored in accordance with the following:

    • Competitive Need Limit (CNL) waiver: imports from a beneficiary country may not exceed a certain set limit or 50% of total U.S. imports, otherwise GSP benefits will be terminated by July 1 of the next year. A CNL waiver may be requested for products that exceed CNL. The CNL for 2017 Annual Review is $180 million (an increment of $5 million per year).
    • De Minimis waiver: imports from a beneficiary country that exceed CNL, but the total value imported by the U.S. was less than De Minimis level, may retain GSP eligibility with a De Minimis waiver. The De Minimis level for 2017 is $23.5 million (an increment of $500,000 per year).
    • Redesignation: products that lost GSP eligibility because imports were over CNL during a previous year, but during the most recent year, imports were below CNL, may request redesignation of GSP benefits.


    Country Practice Review

    • Under the GSP statute, criteria for determining a country’s eligibility include the extent to which the country provides its workers with internationally recognized worker rights, whether or not market access is given for U.S. goods and services, and whether or not U.S. patent, copyrights and trademarks are provided protection. If the USTR determines that a country does not meet these requirements, GSP status can be revoked. During each annual review, USTR accepts petitions from interested parties to conduct a review of any beneficiary country’s trade practices to determine if the country meets the above GSP statutory criteria
    • During the 2015 Annual Review, the AFL-CIO filed a petition against Thailand alleged that it does not protect nor provide worker rights up to international standards. The AFL-CIO requested that Thailand be removed from the list of GSP beneficiary countries.
    • There is no specified statutory deadline for the USTR to make a determination of the country practice review.