The US government has launched a new effort to ensure developing countries benefiting from product-specific duty-free access to the American market are meeting the eligibility criteria of the Generalized System of Preferences (GSP) trade preference programme.
The initiative will see the Office of the US Trade Representative (USTR) put a heightened focus on concluding any outstanding GSP cases and set-up a new inter-agency process to assess beneficiary country eligibility. The agency process will complement the current petition receipt and public input process for country practice reviews, which it says will remain unchanged.
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In order to quality for GSP, a beneficial country must meet 15 eligibility criteria established by Congress, including respecting arbitral awards in favour of US citizens or corporations, combating child labour, respecting internationally recognized worker rights, providing adequate and effective intellectual property protection, and providing the US with equitable and reasonable market access.
The new additional process will involve a triennial assessment by USTR and other relevant agencies of each GSP beneficiary country’s compliance with the statutory eligibility criteria. If the assessment of a beneficiary country raises concerns regarding the country’s compliance with an eligibility criterion, the Administration may “self-initiate” a full country practice review of that country’s continued eligibility for GSP.
The first assessment period will focus on GSP beneficiary countries in Asia. The Trump Administration will assess GSP beneficiary countries in other parts of the world in the second and third years of this process.
“Countries receiving US trade benefits must meet the eligibility criteria established by Congress,” says Ambassador Lighthizer. “By creating a more proactive process to assess beneficiary countries’ eligibility, the United States can ensure that countries that are not playing by the rules do not receive US trade preferences. This sets the correct balance for a system that helps incentivize economic reform in developing countries and achieve a level playing field for American businesses.”
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By GlobalDataAround 120 developing countries and territories currently participate in the GSP programme. In 2016, the total value of imports that entered the US under the trade preference programme was US$18.9bn.
