Bush administration considers future of GSP benefits

Bush administration considers future of GSP benefits    The Bush administration has started the second phase of its review of the Generalized System of Preferences, a program that provides duty-free treatment on goods from 133 developing countries.
   GSP was established by the 1974 Trade Act. Current congressional authorization of the program expires Dec. 31.
   “One of the concerns that Congress has raised is that GSP benefits go largely to few countries, while many developing countries are not trading much under the program,” said U.S. Trade Representative Susan Schwab in a statement.
   The review, which is the first of its type in 20 years, will consider whether to limit, suspend or withdraw the eligibility of those GSP beneficiaries for which the total value of U.S. imports under GSP exceeded $100 million in 2005. Other considerations are whether the GSP beneficiary was classified as an upper-middle-income economy in last year or accounted for more than 0.25 percent of international exports in 2005, as reported by the World Trade Organization.
   GSP beneficiaries that meet this criteria are Argentina, Brazil, Croatia, India, Indonesia, Kazakhstan, Philippines, Romania, Russia, South Africa, Thailand, Turkey and Venezuela. According to the USTR, 22 countries have graduated from GSP since 1989, such as Hong Kong, Singapore, South Korea, Taiwan and Malaysia.
   In 2005, the United States imported $26.7 billion under the GSP program, an 18 percent increase over 2004.
   The Bush administration is also conducting a review of the current waivers to the GSP program’s competitiveness need limitations (CNLs). These waivers allow certain products from specific countries to enter duty-free into the United States, without being subject to GSP statutory market share and annual import caps.
   The USTR noted that there are 19 GSP beneficiaries with CNLs. They include Argentina, Bosnia-Herzegovina, Brazil, Colombia, Croatia, India, Indonesia, Ivory Coast, Kazakhstan, Macedonia, Peru, Philippines, Romania, Russia, South Africa, Thailand, Turkey, Venezuela and Zimbabwe.
   Since the CNL waivers were first authorized by Congress in 1984, the president has used his authority to terminate waivers for frozen berries from Chile in 2003 and for wrought titanium from Russia in 2004.
   For more information about the GSP reviews, access online: https://www.ustr.gov/Trade_Development/Preference_Programs/GSP/Section_Index. html. Comments are due to the USTR by Sept. 5.