While we generally focus on the benefits to U.S. companies of the GSP program, it is important to remember that sourcing from GSP countries has a positive impact on the lives of workers and their families in developing countries. Sometimes, the benefits to poor workers come simply from having a job that otherwise would not exist without the additional U.S. demand created by GSP. Often times, though, U.S. companies importing under GSP choose to go above and beyond in terms of promoting development.
For example, Preferred Brands International in Stamford, Connecticut imports ready-to-eat food products from India. The company cares about more than just increasing sales of its Tasty Bite brand foods: it uses its 23-acre farm in India as a demonstration location to teach best practices in organic and sustainable farming and has a number of community initiatives such as a scholarship fund for factory workers’ children.
Similarly, Nina Designs in Emeryville, California imports fair trade jewelry from multiple GSP countries. This small business has funded $115,000 in microloans to more more than 150 women artisans in 20 developing countries, most of which are GSP beneficiaries. One of the company’s microloan partners is Novica (also on the GSP Supporter List), which has sent more than $68 million to artisans around the world. Nina Designs’ commitment to employees is simply inspirational.
The examples of the companies above run counter to what nearly all trade critics think about imports from lower-wage countries. While GSP and programs like it help make such development possible, they are not guaranteed. For example, WorldFinds in Westmont, Illinois paid $6,000 in extra taxes in the first month after GSP expired in 2013. In the words of founder Kelly Weinberger:
“These tariffs are paralyzing us as a small fair trade business with limited resources and an already tight clash flow. Suddenly a huge amount of money needs to be reallocated to pay tariffs instead of being able to order more product from our low-income artisan groups.”
So while GSP benefits help economic development both at home and abroad (such as WorldFinds artisans pictured above), GSP expiration can quickly reverse those gains. That is just one more reason that Congress must pass legislation to renew GSP early next year to prevent another expiration when its authorization expires on December 31, 2017.
This post is part of the 5th Annual “Imports Work for America Week.“ For more information visit the Imports Work website.