U.S. adds South Sudan to GSP, removes Argentina

   The White House through presidential proclamation on Monday designated the Republic of South Sudan as a new beneficiary of the Generalized System of Preferences (GSP) and suspended Argentina from eligibility in the trade program.
   “The president’s designation of the Republic of South Sudan as a GSP beneficiary country provides an opportunity for this newly independent nation to use trade to boost its economic development and, we hope, will encourage it to continue needed economic reforms,” said U.S. Trade Representative Ron Kirk in a statement.
   Under GSP, nearly 4,900 products from South Sudan will now be eligible for duty-free treatment upon entry into the United States.
   President Obama’s action is also a step toward consideration of South Sudan’s eligibility for trade benefits under the African Growth and Opportunity Act (AGOA). “We look forward to working with Congress on near-term passage of legislation extending AGOA’s third-country fabric provision, which is crucial for continued success of the program,” Kirk said.
   AGOA was established in 2000 to provide eligible sub-Saharan African countries with duty-free access for a broader variety of products than is available under GSP, including apparel, footwear, and some agricultural and processed food products. AGOA’s third-country fabric provision allows most sub-Saharan African AGOA beneficiaries to use fabric from any source in the production of qualifying duty-free apparel subject to duty-free treatment when imported into the United States. This provision is scheduled to expire on Sept. 30, 2012.

Kirk

   “The suspension of Argentina’s GSP eligibility is based on a finding that the country is not in compliance with the statutory GSP eligibility criteria set by Congress,” Kirk said. “Specifically, the Argentine government has failed to pay two longstanding arbitral awards in favor of U.S. companies.”
   The awards, totaling about $300 million plus interest, were rendered by the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID) arbitral tribunals in 2005 and 2006 and were subsequently upheld against challenge by Argentina in ICSID annulment proceedings. The Argentine government has not paid the awards, despite repeated requests to do so by the two petitioners and the U.S. government. In 2011, U.S. imports from Argentina benefiting from GSP treatment totaled $477 million (about 11 percent of total imports from Argentina), making Argentina the ninth-ranking source of imports under the GSP program last year.
   The GSP action on Argentina becomes effective 60 days after the publication of the presidential proclamation in the Federal Register.
   Congress created the GSP program in the 1974 Trade Act to help developing countries expand their economies by allowing certain goods to be imported to the United States duty-free. Under the GSP program, 129 beneficiary developing countries, including 42 least-developed countries, are eligible to export up to 4,881 types of products to the United States duty-free. In 2011, the total value of GSP-based U.S. imports was $18.5 billion, according to the Office of the U.S. Trade Representative.