GSP program successful in trade ties with developing world
21 Dec '06
2 min read
US President - George W Bush
President Bush signed legislation that continues the Generalized System of Preferences (GSP) program for two years until December 31, 2008.
This is the first time since the GSP program was created in 1974 that it has been extended without a lapse.
While reauthorizing the program for all current beneficiaries, the legislation includes new statutory thresholds to identify products that have reached a level of competitiveness suggesting that they no longer warrant duty-free benefits.
The current GSP statute includes two “competitive need limitations (CNLs)” on the eligibility of a product for benefits under GSP: (i) if the annual trade of a product from a specific country exceeds a monetary threshold ($125 million in 2006); or (ii) if the annual trade of a product from a specific country exceeds 50 percent of total U.S. imports of that product.
The statute also authorizes the President to grant a waiver to the limitations if certain statutory conditions are met.
The legislation signed amends the statute to provide that the President should revoke any existing CNL waiver that has been in effect for at least five years, if a GSP-eligible product from a specific country has an annual trade level in the previous calendar year that exceeds 150 percent of the annual trade cap or comprises 75 percent of all U.S. imports of that product.
“The GSP program has proven to be very successful in creating U.S. trade with and development in developing countries,” said Ambassador Susan C. Schwab.
marketing@alchempro.com
