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Schwab Announces GSP Program Review
By by Glen Shapiro, LawAndTax-News.com, New York

03 July 2008

US Trade Representative, Susan C. Schwab on Monday announced the outcome of the 2007 Annual Review of the Generalized System of Preferences (GSP), a program created in 1974 that provides duty-free treatment for nearly 5,000 products exported to the United States from 132 beneficiary developing countries.

As a result of this year’s review, duty-free treatment for the vast majority of products covered by GSP will continue, she announced.

In addition, the Administration will continue GSP eligibility for 99 exports from specific countries, even though the quantities of those exports exceeded statutory thresholds in 2007.

As authorized by the GSP statute, the Administration will waive those thresholds known as “competitive need limitations” (CNLs).

In keeping with the goals of the program and Congressional intent, GSP eligibility will be terminated for 25 products from specific beneficiary countries, in order to advance a more targeted and effective program to promote economic development.

“Congress created the GSP program to serve as a bridge for developing countries as they increase their participation in the global trading system,” Ms Schwab commented, continuing:

“The GSP program has helped to promote development and reduce poverty in the developing countries while expanding our bilateral trade. It has also helped make the United States one of the world’s most open economies to products of developing countries.”

In this year’s review, the Administration granted waivers of the CNLs to ensure continued GSP duty-free benefits to 99 products from 15 beneficiary countries, with an approximate import value of USD422mn in 2007.

In addition, three types of aluminum products were added to the list of GSP-eligible products from all beneficiary countries.

Consistent with statutory provisions concerning product competitiveness and after extensive analysis, the Administration determined that 25 products from beneficiary countries can compete effectively in the US market without duty-free treatment, and will no longer be eligible under the GSP program.

In 2007, these imports were valued at approximately USD1.4bn.

This group includes 21 products that exceeded the statutory CNLs, and four products that have had waivers to the CNLs for the past five years and are now subject to statutory “super-competitiveness” thresholds.

The Annual Review also involved an analysis of petitions to withdraw or limit a country’s GSP benefits for not meeting GSP eligibility criteria.

These criteria include the extent to which a country provides adequate and effective protection of intellectual property rights (IPR), and whether a country is taking steps to ensure internationally recognized worker rights.

Several beneficiaries remain under active scrutiny because of such concerns, including: Lebanon, Russia and Uzbekistan regarding their lack of IPR protection, and Bangladesh, Niger, the Philippines and Uzbekistan regarding worker rights.

With respect to a petition from the International Intellectual Property Alliance on Russia’s IPR protection, the Administration revealed that it continues to monitor closely the Russian government’s progress in meeting the commitments it undertook in the November 2006 Agreement with the United States on IPR, and to seek further progress in the context of ongoing WTO accession negotiations.

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