Thanks for stopping by to check out our website about the GSP trade program. Despite a “long-term” renewal in 2011, the GSP program is set to expire on July 31, 2013 – less than 3 months away! If GSP expires, American companies will face an extra $2 million per day in new taxes. We can’t let that happen.
So poke around and learn about how GSP benefits American companies. More importantly, be sure to get engaged in GSP renewal by:
Throughout the week, we’ve written about how GSP supports American jobs, reduces costs for families (whether they know it or not), improves the competitiveness of American manufacturers, and promotes development. Sounds great, right?
There’s just one problem: GSP is set to expire on July 31.
Given all the positive impacts of GSP both at home and abroad, the solution seems simple: Congress should immediately take up legislation to extend GSP. The Coalition isn’t alone in advocating for immediate renewal. More than 160 American companies and associations have called on Congress to do just that.
Such legislation should extend GSP for as long as possible. Why? Because long-term renewals are the key to increased GSP usage, as you can see below (check out this post for all the gory details).
The July 31 expiration date is particularly worrisome given the Congressional recess beginning on August 2nd. If Congress is unable to renew GSP before leaving DC, importers will face a guaranteed six weeks of tariffs. At a cost of about $2 million per day, failure to act before the recess virtually guarantees that American companies will pay at least $75-$100 million in new taxes.
Keep this fact in mind: GSP duty-free treatment supports American jobs and U.S. competitiveness, and putting it at the tail end of the Congressional “to-do” list has adverse consequences. The message of Imports Work for America week is simply this: imports work, and programs like GSP that support imports should be a priority for American policy makers.
This post is part of the 2013 Imports Work for America Week initiative, an effort by a number of organizations and individuals in the trade policy community to talk about the benefits of imports for the U.S. economy. You can visit the Imports Work website here.
So far, we have focused on how the GSP program benefits the United States, whether we’re talking about American jobs, families, or manufacturing. But we need to remember the primary purpose of GSP: to provide developing countries with a way to sell their goods to U.S. buyers. So today we talk about the positive impact GSP has on developing countries.
GSP works by offering duty-free access to the U.S. market instead of direct aid. GSP covers about 3,400 products from 130 developing countries. Forty-three “least-developed” countries – including South Sudan, the world’s newest country – receive GSP benefits for an additional 1,450 products. All totaled, U.S. companies bought nearly $20 billion worth of GSP products in 2012.
To ensure that GSP maintains its development goals, countries automatically “graduate” from the program if their per capita income rises to a level deemed to be “high income” by the World Bank. According to the latest data, the high-income threshold is $12,476 – about a quarter of the per capita income in the United States. Typically, the top GSP beneficiaries fall well below this threshold.
For example, per capita income for India, the top GSP beneficiary, is just $1,420. Thailand, the second largest beneficiary in terms of U.S. imports under the program, has a per capita income of $4,420. Indonesia and Philippines, which ranked 4th and 6th in imports under the program in 2012, both have per capita incomes between $2,000 and $3,000.
GSP makes exports from these countries more competitive in the U.S. market. In doing so, it supports good-paying jobs that allows workers – and their families – to escape poverty. By offering access instead of direct aid, the GSP program offers a hand up, not a handout, to the benefit of all.
Yesterday, we showed some everyday household items (plates, picture frames….wine) that receive duty-free treatment under GSP and reduce costs for American families in the process. Yet while families often save money from GSP unknowingly, manufacturers incorporate GSP into their sourcing strategy to reduce costs and increase competitiveness.
Today’s example is another product found in just about every home:
We’re not talking about the remote control Continue reading
GSP provides clear benefits to American families by eliminating taxes on a variety of food products and home goods. In 2012, GSP eliminated nearly $280 million in import taxes on those products alone.
But instead of talking about how GSP reduces prices for the American families in the abstract, we thought we’d show you some ways the Coalition’s own Dan Anthony uses GSP products every day. For example, here’s a picture of his dinner from last night:
Like almost every night, the meal was served on GSP-eligible dinnerware from Indonesia. The plate and bowl are part of a set for which GSP eliminates import taxes of 8 percent! And it’s not just the plates: the wine is from South Africa and also eligible for duty-free treatment because of GSP.
At meal time, our four-legged family members may also benefit from GSP. Every night before eating, Duchess takes a moment to appreciate the fact that GSP eliminated the 2 percent tariff on her stainless steel dog bowl from India:
“Thanks Congress! I can almost taste the GSP savings!” – Duchess
While they actually live far away, we keep our family members close Continue reading
The GSP trade program was created in the 1970s to promote development in poor countries through “trade, not aid.” Over the years, GSP has had a positive impact on jobs where some might not expect it: here in the United States. How is that so?
American companies use the GSP program to import a wide variety of products from developing countries around the world. In 2012, American companies saved nearly $750 million on imports under GSP. The majority of these imports are raw materials, components, parts, and machinery used by U.S. manufacturers in their American production facilities.
GSP Imports by End Use, 2012
Although the GSP program benefits only a small share of U.S. imports, lower prices for these inputs reduce production costs and help keep American manufacturers competitive – and thus able to hire American workers. This is particularly true for raw minerals and chemicals that are not otherwise available in the United States.
Furthermore, whether raw materials or consumer products, someone needs to move the goods around the country and then sell the final product. In fact, a study for the U.S. Chamber of Commerce estimated that moving “GSP imports from the docks to the retail shelves” alone Continue reading
Yesterday we posted about what we try to do in Hill meetings and the type of info we provide to staffers, but that still doesn’t answer the bigger question: why are the meetings even necessary?
In the eyes of most members of Congress, GSP is a good program – viewed in the abstract. When you show the direct impact on the bottom line of employers in their district, GSP can become a great program whose renewal is vital to constituents.
Members of Congress not only need to hear 1) how GSP benefits constituents; but also 2) that those constituents will be mad as hell if GSP is allowed to expire again.
Meetings help a lot with the first part, particularly when we have company information from things like our GSP Supporter List. But that second part? That’s where company contacts enter the picture. Continue reading
Earlier today, we had two more meetings with staff for House Members that serve on the Ways and Means Committee: Reps. James Renacci (OH-16) and Pat Tiberi (OH-12). These were meetings #20 and #21 since the beginning of last week, and we have more coming up. Some of you might wonder, what do you do in these meetings and why do they matter?
What Do We Do?
At the most basic level, we make sure they know that GSP is scheduled to expire on July 31. Sounds obvious, but… Congress deals with many, many issues and if GSP importers don’t remind them about GSP, who will?
We also highlight some key facts and figures from our GSP Annual Report.
Most importantly, we show them the local impacts of GSP. For both of today’s meetings, that involved our new 2012 Ohio report: Continue reading
