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April 17, 2020

Thailand to lose some US GSP benefits from next week

Thailand is set to lose its Generalized System of Preferences (GSP) duty-free trade privileges with the US on a raft of items, including dresses and footwear parts, from the end of next week.

Thailand is set to lose its Generalized System of Preferences (GSP) duty-free trade privileges with the US on a raft of items, including dresses and footwear parts, from the end of next week.

The move was outlined by the United States Trade Representative (USTR) in October last year, and comes into force from 25 April 2020. The decision was taken due to Thailand’s failure to provide internationally-recognised worker rights.

Around one-third of eligible products from Thailand (valued at about $1.3bn), will be affected. While it mainly impacts the seafood and shipping industries, women’s or girl’s dresses, gloves, outer soles and heels for footwear, and articles of feathers or down will also be hit.

While the GSP programme excludes most textile and apparel products exported to the US, the designation of a country as eligible for GSP sends a strong message that it is taking steps to improve worker and intellectual property rights. Likewise, its removal indicates ongoing problems in these areas.

Apparel exports from Thailand to the US were subject to an average tariff rate of 14.4% for knitted apparel (HS chapter 61) and 10.6% for woven apparel (HS chapter 62) in 2018. 

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