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 supported 82,000 jobs – a figure that did not count any jobs at companies using the program!
These GSP-specific findings jive with those of the new “Imports Work for America” report, which quantifies the positive contribution of all imports to the U.S. economy. The study finds that imports improve U.S. manufacturing competitiveness and raise American standards of living – and support 16 million net jobs along the way!
With GSP expiration looming just several months away, Congress needs to know that an expiration of GSP puts jobs at risk. And we’re not just talking about jobs in developing countries, but American jobs here at home.
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.