Welcome to Renew GSP Today

Posted on May 4, 2011 by

Thanks for stopping by to check out our website about the GSP trade program and the impact its expiration is having on American companies and workers.  We encourage you to take some time to browse around.  Our most popular options include:

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Imports Work for America: A Policy Agenda

Posted on May 11, 2012 by

As Imports Work for America Week draws to a close, it’s time to look ahead: what should policymakers do to ensure that our trade agenda includes initiatives that enable American workers, families and producers to fully benefit from imports.  There are many, but the Coalition for GSP suggests Congressional passage of a long-term renewal of the Generalized System of Preferences (GSP) program.

The current GSP authorization runs through July 31, 2013.  While an expiration of next summer may seem a long way off and something Congress can put on the “back burner” for now, there are two main problems with waiting until the last moment.  First, the closer we get to the expiration date, the more uncertainty companies face about whether their imports will face tariffs.  Second, renewal legislation is often postponed from a packed late-session Congressional calendar until GSP expires altogether and importers have to start paying duties.  The cost of expiration is not insignificant: when GSP expired at the end of 2010 despite strong bipartisan support for its renewal in both the House and Senate, American companies had to find $500 million to pay tariffs before Congress finally renewed GSP.

Beginning conversations sooner rather than later is even more important if Congress intends to consider changes to the GSP program.  Several years ago, the Coalition worked with industry associations, companies, labor unions, and NGOs to develop consensus recommendations on potential changes to the GSP program.  It was an intensive undertaking that lasted two years, and not something Congress can finish in a couple of months.

If instead Congress decides to extend the current program, it should renew the program for at least five years.  Unfortunately, past short-term renewals (and expirations) have discouraged use of the GSP program, as the uncertainty created by the need for Congressional action can outweigh the potential tariff savings.

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 Imports Work for America Week initiative, an effort by a number of organizations and individuals in the trade policy community to start talking about the benefits of imports for the U.S. economy. You can see our earlier blog post about the initiative here, visit the Imports Work website here, or read earlier posts on how GSP works for American jobs, families, manufacturing, and economic development.

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GSP Works for Economic Development

Posted on May 10, 2012 by

We’ve already highlighted the ways that the Generalized System of Preferences (GSP) works for American jobs, families, and manufacturing, but we can’t forget about the original intent of the program: promoting growth in developing countries.

Jagadhri Yamunangar Haryana India old street Mohalla Raipurian

Today, the GSP program provides duty-free access for 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. U.S. companies bought more than $18 billion worth of GSP eligible-products from these developing countries in 2011.

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. The top GSP beneficiaries typically fall far short of this threshold, set at $12,276 in 2010, or about a quarter of the per capita income in the United States.

For example, per capita income for India, the top GSP beneficiary, is just $1,130. Thailand, a close second in terms of U.S. imports under the program, has a per capita income of $4,150. Indonesia and Philippines, which ranked 4th and 6th in imports under the program in 2011, both have per capita incomes between $2,000 and $2,500.

The United States is not alone in providing these benefits; developed countries like Canada, the EU, Japan, and New Zealand have offered similar GSP programs for decades. More recently, developing countries like Brazil, China, India, and Turkey – themselves beneficiaries of certain GSP program – have begun offering their own duty-free programs, particularly for least-developed countries.

By offering access instead of direct aid, the GSP program offers a hand up, not a handout, to the benefit of all. It should come as no surprise then that developing countries are the fastest-growing purchasers of U.S. exports, in part because they earn dollars by exporting their products to the United States.

This post is part of the Imports Work for America Week initiative, an effort by a number of organizations and individuals in the trade policy community to start talking about the benefits of imports for the U.S. economy. You can see our earlier blog post about the initiative here or visit the Imports Work website here.

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GSP Works for American Manufacturing

Posted on May 9, 2012 by

All too often, people think a product is either “Made in USA” or made somewhere else.  Yet American manufacturers use imported components to reduce costs or gain access to materials not available in the United States.  Similarly, imports often contain American content previously exported and assembled abroad.  As a result, most products are both “Made in USA” and somewhere else, regardless of what the label says.

American manufacturers benefit from imports even more when they use trade programs like the Generalized System of Preferences (GSP), which eliminates tariffs imposed on certain products from about 130 developing countries.  In fact, about 65% of GSP imports in 2011 were industrial supplies, raw materials, capital goods, and parts (many of which are not otherwise available), so manufacturers got to keep a large portion of the $700 million in the tariff savings that resulted from GSP last year.

For example, $1 billion in ferroalloys used by steel producers and imported duty free under GSP saved American steel manufacturers about $27 million.  Steel producers weren’t the only American manufacturers to benefit: GSP reduced the costs of industrial chemicals by a whopping $64 million; of aluminum sheets, plates, and foils by $24 million; of auto parts by $23 million, and of electric motors, transformers, and parts by $15 million.

The list of savings goes on, but the point is clear: GSP works for American manufacturers by lowering costs for key inputs and allowing them to remain competitive when selling at home and abroad.

This post is part of the Imports Work for America Week initiative, an effort by a number of organizations and individuals in the trade policy community to start talking about the benefits of imports for the U.S. economy. You can see our earlier blog post about the initiative here or visit the Imports Work website here.

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GSP Works for American Families

Posted on May 8, 2012 by

When imports enter the United States, they often face tariffs – taxes – collected by the U.S. government.  Some of these tariffs are pretty high: 13.5% for inexpensive silver jewelry, 12.5% for flashlights, and 10.0% for coffee mugs.  Everyday food products are often worse: 17.9% for nuts and seeds, 15.0% for Parmesan cheese, and 9.6% for pickles.

So it’s good news for American families when another U.S. government trade program exists to save them from paying these taxes. The Generalized System of Preferences (GSP) is such a trade program, eliminating tariffs imposed on certain products imported from about 130 developing countries around the world.  GSP was created in the 1970s as part of an international effort to promote development through “trade, not aid.”  Yet many of the benefits from the GSP program go straight to the wallet of American families.  Last year, more than $5.5 billion in consumer goods entered the United States duty free under GSP.

And as a result, American families saved millions: $52 million for jewelry, $35 million for tires, $10 million on sugar, and $8 million each for rugs, candies, and fruits and nuts.  While most families won’t think about GSP (or any U.S. trade program) while shopping for that new set of tires, rug, or jar of pickles, the program saves them real money.

This post is part of the Imports Work for America Week initiative, an effort by a number of organizations and individuals in the trade policy community to start talking about the benefits of imports for the U.S. economy.  You can see our earlier blog post about the initiative here or visit the Imports Work website here.

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GSP Works for American Jobs

Posted on May 7, 2012 by

The Generalized System of Preferences (GSP) is a U.S. trade program that eliminates the tariffs (i.e., taxes) paid by American companies when they import certain products from about 130 developing countries around the world.  GSP was created in the 1970s as part of an international effort to promote development through “trade, not aid.”

So how does a program aimed at increasing production in poor countries abroad create American jobs?  It turns out that most of the imports that benefit from duty-free GSP treatment are raw materials, components, parts, and machinery used by U.S. manufacturers in their American production facilities. Although the GSP program benefits only a small slice of the U.S. import pie, American companies used it to save more than $700 million in import taxes last year.  Lower prices for these inputs reduce production costs and help keep American manufacturers competitive – and thus able to hire American workers.  Furthermore, someone needs to both 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 supported 82,000 jobs – a figure that did not count any jobs at companies using the program!

GSP clearly helps American workers when in effect, but has been plagued by short-term renewals and even expirations in the recent past, including a 10-month expiration from January to November 2011.  That expiration period, during which importers had to pay tariffs, hit American workers hard. These unforeseen cost increases forced manufacturers such as Mullican Flooring and Besa Lighting to lay off workers.

So the next time someone says that imports cost U.S. jobs, remember all the workers using GSP to produce something new, the people responsible for moving the goods around country (both the direct GSP imports and the products using GSP components), and finally those selling the finished products.  You’ll see that even a relatively small import program can have a large, positive impact for American workers.

This post is part of the Imports Work for America Week initiative, an effort by a number of organizations and individuals in the trade policy community to start talking about the benefits of imports for the U.S. economy.  You can see our earlier blog post about the initiative here or visit the Imports Work website here.

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Imports Work for America Week

Posted on May 7, 2012 by

A number of organizations and individuals in the trade policy community have been working on a new initiative called Imports Work for America Week with the goal of providing a chance to talk about how imports, in addition to exports, create benefits for the U.S. economy.

Imports Work for America Week will take place May 7 to May 11 and each day will have a common theme – detailed on the website here.

Since imports are near and dear to the heart of the Coalition for GSP and our members, we’ll be posting a new article everyday this week highlighting how imports work for American jobs, families, manufacturing, and economic development.

However, we’re also looking for like-minded companies and associations to get involved, and there’s lots of ways you can do it, such as adding your name to the member list,
following the initiative on twitter and joining the conversation by tweeting with the hashtag #importswork, and submitting photos that tell how imported products benefits America.

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Companies Begin Receiving GSP Refunds

Posted on December 29, 2011 by

Great news today (from one of our GSP Supporter List companies) that its GSP refunds had arrived.  We knew refunds were scheduled to start going out last Friday, but this is the first we’ve heard from someone with check in hand.

Although most of us would probably like to forget the last GSP renewal fight, the next one is just around the corner.  We’re always looking for more information on how GSP helps American companies and their employees, so drop us a line to let us know when you get your refund and tell us how you intend to use it (e.g., hire/rehire workers, purchase new equipment, give out year-end bonuses, etc.).

Have a safe and happy New Year!

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