GSP or The Generalized System of Preference provides duty-free treatment to goods of 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.
The GSP program is currently scheduled to expire on Dec 31 2020 unless an extension or renewal is approved by Congress. Congress is scheduled to recess on Dec 18, 2020. While the Senate Finance committee has proposed an 18-month extension of the current GSP program without any changes, the extension has not been approved.
Recently House Ways and Means Trade Subcommittee Chairman Earl Blumenauer introduced a bill that, while leaving the GSP program as it currently stands, would also add certain eligibility requirements. These requirements would not be mandatory but the bill would require that the countries be monitored, their compliance recorded and reported.
The bill would also require the International Trade Commission ITC to submit a report to Congress regarding the use of the program by the Least Developed Countries (LDC) and what steps these countries were doing to prevent abuse of the GSP program by non-beneficiary countries claiming beneficiary rights using transshipments. The report is due by May 1, 2021, and the bill would extend the GSP program only until June 30, 2021.
If you would like additional information on the GSP program or any compliance issue, please contact the John S Connor Compliance Team.