The United States and Generalized System of Preferences (GSP) Agreement – What You Need to Know
The United States Generalized System of Preferences (GSP) is a trade program designed to promote economic development in developing countries by allowing eligible products to enter the United States free of duty. The GSP was first enacted in 1974 and has since then provided duty-free treatment to thousands of products from over 100 beneficiary countries.
The GSP program is authorized under the Trade Act of 1974, as amended, and is subject to periodic renewal by Congress. The last renewal was in March 2018, extending the program until December 31, 2020. However, the program was not renewed again, and as of January 1, 2021, the GSP expired.
The U.S. government has been reviewing the GSP program and has been engaging in discussions with beneficiary countries to determine the direction of the program. While discussions continue, the benefits of the GSP are currently not available to beneficiary countries.
The U.S. government has been fairly selective in terms of which countries are eligible for the GSP program. While the program is intended to benefit developing countries, the United States has set criteria that must be met for a country to be eligible. The criteria include respect for workers’ rights, intellectual property rights, and a commitment to combating corruption.
To benefit from the GSP program, beneficiary countries must meet the eligibility criteria and submit a petition to the U.S. government requesting the program’s benefits. The petition is reviewed by the U.S. government, and if approved, eligible products from that country can enter the United States duty-free.
The GSP program has been beneficial to both the United States and beneficiary countries. The program has helped promote economic growth in developing countries by creating new markets for their products and increasing foreign investment. The United States has also seen benefits, such as increased market access, economic growth, and job creation.
In conclusion, the GSP is a crucial program that has significant economic benefits for both the United States and developing countries. Discussions are ongoing between the U.S. government and beneficiary countries to determine the program’s future. Until then, eligible products will not enter the United States duty-free. However, the U.S. government’s commitment to the program is evident, and it is expected that it will be renewed in the near future.