As of midnight tonight, it will be exactly one month since Congress allowed GSP to expire. Since trade data reporting lags by about 6 weeks, we can’t know the value of January 2011 imports until mid March. We’re impatient, though, so we looked at imports under GSP in January 2010 to see what GSP expiration at this time last year would have cost. Not surprisingly, the results were significant.
In January 2010, GSP saved $50 million on nearly $1.7 billion worth of GSP-eligible imports. Products with GSP tariff savings exceeding several millions dollars in January 2010 include:
-Jewelry ($5.5 million)
-Organic chemicals ($3.4 million)
-Plastics & plastic products ($3.4 million)
-Rubber & rubber products ($3.4 million)
-Electrical equipment & parts ($2.9 million)
Other products whose January 2010 GSP savings exceeded $1 million include machinery, aluminum products, wood and wood products, automotive vehicles and parts, iron and steel, fruit & vegetable products, prepared foods, iron and steel products, sugar, stone products, and inorganic chemicals.
The actual costs of GSP expiration in 2011 will likely be even higher. In January 2010, GSP imports reached a level not seen since the summer of 2003, although imports for the rest of 2010 increased steadily.
It remains to be seen whether companies to shift away from GSP beneficiary countries to suppliers in China, whose prices are not affected by the expiration (since it is not eligible). As we’ve shown in the past, the start-and-stop nature of the GSP program in the 1990s had a dramatic effect on program usage.
Congress must act to renew GSP soon. The cost of doing nothing – millions of dollars per day – is simply too high to ignore.