Generalized System of Preferences (GSP)

  Background

The U.S. Generalized System of Preferences (GSP) is a program providing free rates of duty for products from beneficiary developing countries to encourage their economic growth, beginning in 1976. More than 145 countries are eligible for this trade preference in over 4400 product items (except textile and apparel, footwear and other sensitive items such as steel, glass, etc.).

The original GSP program has expired and has been extended many times. The most recent program expired on June 30, 2001.

Annual Review: As provided for under the U.S. GSP statute, each year the USTR (GSP subcommittee which consists only officials from Clinton Administration) conducts an annual review between June 1 – April 30, to consider the addition, removal or restoration of eligibility for products and/or countries according to criteria of the GSP statute. Products may be added, removed or restored in accordance with the following:

• Competitive Need Limit (CNL) waiver: imports from a beneficiary country may not exceed a certain set limit or 50% of total U.S. imports, otherwise GSP benefits will be terminated by July 1 of the next year. A CNL waiver may be requested for products that exceed CNL. The CNL for 2000 is $95 million
  
  
• De Minimis waiver: imports from a beneficiary country that exceed CNL, but the total value imported by the U.S. was less than De Minimis level, may retain GSP eligibility with a De Minimis waiver. De Minimis for 2000 is $15 million.
  
  
• Redesignation: products that lost GSP eligibility because imports were over CNL during a previous year, but during the most recent year, imports were below CNL, may request redesignation of GSP benefits.

 Country Practice Review