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USTR Issues GSP, AGOA Annual Reviews

by Mike Godfrey, Tax-News.com, Washington

03 January 2012


United States Trade Representative (USTR) Ron Kirk has announced the outcome of the 2010 Annual Review under the Generalized System of Preferences (GSP) programme, as well as the results of the annual African Growth and Opportunity Act (AGOA) Eligibility Review.

It was noted that, on October 21, 2011, President Barack Obama signed legislation authorizing the GSP programme until July 31, 2013 and retroactively applying GSP trade benefits for eligible products that entered the United States on or after January 1, 2011.

Under the GSP programme, which was created in the Trade Act of 1974 to help developing countries expand their economies by allowing certain goods to be imported to the US, 129 countries, including 42 least-developed countries, are eligible to export up to 4,881 types of products to the US duty-free. In 2010, the total value of imports that entered the US duty-free under GSP was USD22.6bn.

Kirk said: “GSP is an important element both of this Administration’s trade agenda and of its efforts to help developing countries grow their economies through increased trade. The annual review of GSP helps us to ensure that the programme is working as it should and that developments affecting country and product eligibility are taken into account, consistent with the GSP statute.”

“A well-functioning GSP programme,” he added, “also helps US businesses, workers and consumers by lowering the costs of imported goods, including those used as inputs for US manufacturing.”

Based on the Administration’s review of product petitions accepted for the 2010 GSP Annual Review, President Obama determined that one product – certain non-down sleeping bags – should be removed from eligibility for duty-free treatment under GSP because it is import-sensitive.

In addition, the Administration continues to review several country practices petitions that seek to withdraw or limit a country’s GSP benefits based on that country’s non-compliance with certain statutory eligibility criteria. A public hearing will be held at the offices of the USTR on January 24, 2012, to receive testimony on country practices petitions related to worker rights issues in Bangladesh, Georgia, Niger, Philippines, Sri Lanka and Uzbekistan.

The USTR has also announced President Obama’s decision to designate 40 sub-Saharan African countries as eligible for AGOA benefits in 2012. During this year’s review process, the President determined that all of the countries currently eligible for trade preferences and other benefits under the AGOA would remain eligible, and that no new countries would be added as AGOA beneficiaries.

Kirk commented that “President Obama’s determination is good news for the people of these African nations, as well as for the American businesses and workers trading with these countries. We are proud to announce, after a thorough review by the Obama Administration, that all 40 of these important U.S. trading partners will continue to receive benefits under the AGOA – a vital and growing pillar of US-Africa trade policy.”

AGOA was signed into law by President Clinton in May 2000, and, at its centre, are substantial trade preferences that, along with those under the GSP and Most-Favoured Nation tariff treatment, allow almost all goods produced in the AGOA-eligible countries to enter the US market duty free.

The President’s determination is based on the annual review conducted by the Administration to examine whether the countries named in the Act had met AGOA’s eligibility criteria. Those criteria include establishing, or making continual progress towards establishing, a market-based economy, economic policies to reduce poverty, protection of internationally recognized worker rights and efforts to combat corruption.

On October 25, 2011, President Obama signed a presidential proclamation designating Cote d’Ivoire, Guinea, and Niger as eligible for AGOA benefits. Each of these countries was previously ineligible, but during a separate review process, the President determined that they had met the Act’s eligibility criteria.

Total two-way goods trade with sub-Saharan Africa countries during 2010 was USD82bn. The top US export markets in sub-Saharan Africa for 2010 were South Africa, Nigeria, Angola, Ghana, and Ethiopia. Non-oil imports under AGOA totaled USD4bn and included value-added products such as apparel, footwear, processed agricultural products, and manufactured goods.

AGOA was signed into law by President Clinton in May 2000, with the objectives of expanding U.S. trade and investment with sub-Saharan Africa, stimulating economic growth, promoting a high-level dialogue on trade and investment-related issues, and facilitating sub-Saharan Africa’s integration into the global economy. At the center of AGOA are substantial trade preferences that, along with those under the Generalized System of Preferences and Most-Favored Nation tariff treatment, allow almost all goods produced in the AGOA-eligible countries to enter the U.S. market duty free.

TAGS: tax | Niger | Nigeria | Sri Lanka | law | tariffs | Angola | Ethiopia | Philippines | manufacturing | legislation | Bangladesh | Georgia | Guinea | United States | import duty | trade | Ghana

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