Preferential Market Access – US GSP

The US GSP program was authorized under the Trade Act of 1974 (19 USC 2461 et seq.) and instituted on January 1, 1976. The programme is subject to periodic renewal by the United States Congress. The latest renewal became effective on April 22, 2018.

The GSP programme provides preferential duty-free treatment for over 3,500 products from a wide range of designated beneficiary countries (BDCs), including many least-developed beneficiary developing countries (LDBDCs). An additional 1,500 products are GSP-eligible only when imported from LDBDCs, which include 44 of the 47 LDCs in 2018.

The GSP statute provides that a country loses its GSP eligibility with respect to a product if the Competitive need limitations (CNLs) (quantitative ceilings for each product) are exceeded and if no waiver is granted. For LDCs, all CNLs are automatically waived.

In addition to the special tariffs for LDCs, African LDCs (and others) benefit from the African Growth and Opportunity Act (AGOA).

 Available Smooth Transition Procedures:

There are no explicit smooth transition provisions in the US GSP scheme for LDCs. The United States regularly reviews and modifies its list of beneficiary countries. Samoa, for example, graduated from the LDC group in 2014 but is still included in the list of LDC beneficiary countries.

Utilization by LDCs:

The WTO Committee on Rules of Origin regularly reviews utilization rates under preferential trade arrangements for LDCs: see WTO, Committee on Rules of Origin, Utilization Rates Under Preferential Trade Arrangements for Least Developed Countries Under the LDC Duty Scheme, Note by the Secretariat. 10 October 2018 (G/RO/W/179). Download from docs.wto.org.

Resources:

  1. Information on GSP from the Office of the U.S. Trade Representative (including information on renewal, beneficiary countries and other)
  2. US Generalized System of Preferences Guidebook (2017)
  3. GSP in Use – Country Specific Information