Generalized System of Preferences (GSP) is set to expire on December 31, 2020

arrow Go back

Generalized System of Preferences (GSP) is set to expire on December 31, 2020

Author:

28-Jul-20

Generalized System of Preferences (GSP) is set to expire on December 31, 2020

John S Connor would like to take this opportunity to remind all importers that GSP is currently set to expire on Dec 31, 2020

What is GSP?

The Generalized System of Preferences (GSP) provides duty-free treatment to goods from designated beneficiary countries. The program was authorized by the Trade Act of 1974 to promote economic growth in the developing countries and was implemented on January 1, 1976.

Are goods from all countries eligible for duty free treatment under GSP?

No, country of manufacture does matter as goods for all countries are not eligible for the GSP treatment. Eligibility is typically restricted to economically disadvantaged countries. A list of the countries can be found on the US Trade Representatives website

I found the country I do business with on the GSP list. Does that mean all my imports are eligible for duty free treatment?

No, the program is item specific and certain conditions must be met. If you have concerns or questions, we recommend you reach out to the JSC compliance team (compliance@jsconnor.com), your account, or sales representative (sales@jsconnor.com) for assistance.

Why is the GSP program expiring?

The GSP program requires occasional re-authorization from Congress to continue in force. It has expired several times in the past, most recently at the end of 2017. It was subsequently renewed by Congress in 2018 with the renewal being retroactive to the expiration date.

Will Congress also renew the GSP program sometime in 2021 and make it retroactive?

Unfortunately, there is no guarantee that Congress will renew the program again, when they will do so or if they do so, that the action will be made retroactive to the expiration date this time as well.

What happens if Congress does not renew the GSP program prior to the current expiration of Dec 31 2020?

If Congress does not renew the GSP program then all items that were previously entered under the GSP program at either a free or reduced rate of duty will become dutiable at the standard or Column 1 General rates of duty.

If you know the harmonized tariff (HTS) number applied to the commodities you import, you can look up the current Column 1 General Duty rate online at https://hts.usitc.gov/

Does the expiration of GSP affect other trade preference programs, such as AGOA and CBTPA?

No, imports qualifying for coverage under other Free Trade Agreements such as the African Growth and Opportunity Act (AGOA) and the Caribbean Basin Trade Partnership Act (CBTPA) are not impacted by the expiration of the GSP program.

My business benefits greatly from GSP, what can I do?

John S. Connor strongly encourages all importers who benefit from GSP to monitor the US Trade Representatives website on GSP. The USTR is actively reviewing the measure and has been seeking input from the trade on items to be added or removed from GSP consideration. Notices and updates are posted to their website.