IG10018 — Generalized System of Preferences (GSP): 2019 Overview

/ Generalized System of Preferences (GSP) What GSP Is GSP is the United States' largest and oldest trade preference program. It provides duty-free treatment to U.S. imports from 119 beneficiary developing countries (BDCs). Forty-four of these countries are designated as least-developed beneficiary developing countries (LDBDCs) and received additional tariff benefits. The President holds the primary authority in designating BDCs and products eligible for GSP benefits based on recommendations from the Trade Policy Staff Committee (TSPC), which is chaired by the U.S. Trade Representative. The U.S. International Trade Commission also provides recommendations to the President when designating products. Country eligibility criteria include the level of economic development, reasonable market access for U.S. firms, protection of intellectual property rights (IPR), and granting internationally accepted worker rights. Role of Congress Congress first authorized GSP in Title V of the Trade Act of 1974 and has reauthorized the program repeatedly on a time-limited basis. The current authorization expires December 31, 2020. The President must notify Congress of any designations of countries as BDCs or of termination of GSP status. GSP reporting requirements also include an annual report to Congress on the status of internationally-recognized worker rights within each BDC. BDCs Beneficiary Developing Countries LDBDCs Least-Developed Beneficiary Developing Countries Designation terminated in 2019 Overview 2019 GSP Imports $20.8 Billion GSP importsof all BDCs $2.1 Billion GSP imports of LDBDCs 42.7% Eligible imports under GSP received duty-free treatment* *Excluding additional 1,500 products exclusive to LDBDCs Top GSP Countries India was the largest GSP beneficiary before losing GSP status. In 2018, U.S. GSP imports ($6.3 billion) from India was the highest among BDCs. Argentina $376m ECUADOR $486m SOUTH AFRICA $751m TURKEY $794m CAMBODIA* $1.6b PHILIPPINES $1.9b BRAZIL $2.3b INDONESIA $2.7b INDIA $2.9b THAILAND $4.8b DUTIABLE OTHER DUTY-FREE GSP duty-free *Cambodia is a least-developed BDC Top Eligible Products 3,800+ products may receive duty-free treatment under GSP. 1,500 additional products are eligible for GSP benefits for LDBDCs. GOLD NECKLACES TRAVEL/SPORTS BAGS PLASTIC HANDBAGS GLOVES AND MITTENS LEATHER HANDBAGS > $20 CERTAIN FRUIT JUICE PLATINUM JEWELRY CHRISTMAS LIGHTS AIR CONDITIONER PARTS BEVERAGE SWEETENERS 2019 MAY 17 Turkey’s GSP designation formally terminated based on sufficient level of economic development. 84 FR 23425 JUNE 6 India’s GSP designation terminated for lack of market access. 84 FR 26323 OCT. 30 Ukraine’s benefits partially restored after the President determined the country is providing adequate IPR protection. 84 FR 58567 2020 MARCH 2 TPSC’s GSP Subcommittee begins 2020 annual review. 85 FR 12381 MARCH 5 (Ongoing as of) COUNTRY PRACTICE REVIEWS Azerbaijan, Ecuador, Georgia, Indonesia, Kazakhstan, Thailand, South Africa, and Uzbekistan. COUNTRY DESIGNATION REVIEW Laos. APRIL 25 Thailand’s benefits to be partially suspended for worker rights violations. 84 FR 58567 DEC. 31 Current authorization of GSP expires. Data source: U.S. International Trade Commission Dataweb and U.S. Census Bureau USA Trade Online Information prepared by Liana Wong, Analyst in International Trade and Finance and Mari Lee, Visual Information Specialist. For more information, see CRS Report RL33663, Generalized System of Preferences (GSP): Overview and Issues for Congress, by Vivian C. Jones.

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