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The United States has said that following the territory's significant debt reduction and restructuring efforts, St Kitts and Nevis is a "high income" country and therefore will no longer be eligible for its Generalized System of Preferences (GSP) program, a 36-year-old initiative that provides duty-free treatment to imports into the US from developing countries.
A statement from the White House signed by President Barack Obama stated: “In accordance with section 502(f)(2) of the Trade Act of 1974, as amended... I am providing notification of my intent to terminate the designation of the Federation of Saint Kitts and Nevis as a beneficiary developing country under the Generalized System of Preferences program.”
The statement adds that the US shall terminate GSP status, effective on January 1 of the second year following the year in which such determination is made, i.e. on January 1, 2014.
The US GSP program is designed to promote economic growth in the developing world by providing preferential duty-free entry for up to 5,000 products when imported from one of 128 designated beneficiary countries and territories. US businesses imported USD18.5bn worth of products under the GSP program in 2011, including many inputs used in US manufacturing.
Products that are eligible for duty-free treatment under GSP include: most manufactured items; many types of chemicals, minerals and building stone; jewelry; many types of carpets; and certain agricultural and fishery products. Among the products that are not eligible for GSP duty-free treatment are: most textiles and apparel; watches; and most footwear, handbags, and luggage products.
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