ANNOUNCED AS TEMPORARYNo
On June 30, 2016 the Office of the U.S. Trade Representative (USTR) announced the outcome of the annual product review under the Generalized System of Preferences (GSP) program. The GSP provides duty-free treatment to certain goods imported from beneficiary countries, and the annual review process offers several means by which the list of eligible products and countries can be expanded or contracted. This latest round has resulted in the addition of some products and the removal of others. Some of these decisions took effect on July 1, 2016, and others will not take effect until January 1, 2017.
The list of GSP-eligible products is larger for those countries that are designated as Least Developed Beneficiary Developing Countries (LDBDCs) for purposes of the GSP. In this review the USTR expanded duty-free treatment for LDBDCs, as well as the beneficiaries of the African Growth and Opportunity Act (AGOA), to certain travel goods. These include certain luggage, backpacks, handbags, and wallets. The Trade Preference Extension Act of 2015 gave the president the authority to add certain travel and luggage goods products to GSP, subject to the regular, petition-driven review process. The 27 HTS subheadings cited in the TPEA included luggage, handbags, backpacks, and pocket goods (such as wallets).
Although this round resulted in the designation of some of these products for a limited number of GSP beneficiaries, the American Apparel & Footwear Association (AAFA) expressed 'deep disappointment with President Obama's decision to proclaim very limited duty-free treatment for travel goods.' The group noted that the president 'has delayed indefinitely a decision on granting travel goods benefits to all other GSP beneficiary developing countries.' In addition to that decision, this round resulted in the removal of some products from specific GSP countries where the country is sufficiently competitive and so as to no longer need tariff preferences to compete in the U.S. market, including fluorescent brightening agents and PET resin from India. It also led to the granting of competitive need limitation waivers, ensuring continued GSP duty-free benefits, for 114 products from 15 countries. Without such waivers, the limitations established by law would have resulted in the removal of GSP treatment on a product- and country-specific basis.
Responding to criticism that it should have added more travel goods to GSP treatment, the USTR announced on August 25, 2016 that it would reconsider this issue as part of the 2016-2017 review of the program.
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