On Monday, the Coalition for GSP submitted formal comments for the “Administration’s Reviews and Report to the President on Trade Agreement Violations and Abuses,” which is being led by the Office of the U.S. Trade Representative (USTR) and the Department of Commerce. The review stems from an Executive Order (EO) in April that – unlike past EOs – specifically raised issues associated with U.S. preference programs such as GSP. The GSP Coalition’s comments focused on three main points:
- The GSP program helps protect American workers, manufacturers, farmers, and ranchers from unfair treatment in more than 120 trading partners. The GSP program’s extensive eligibility criteria, along with the Annual Review process, ensures that interested parties have regular opportunities to address perceived short-comings in GSP beneficiary developing countries (BDCs).
- Expanding GSP product coverage would make it a more effective “carrot and stick.” While incredibly important to current users, only 9.4 percent of U.S. imports from BDCs claimed GSP preferences in 2016. In fact, the United States collected about $6.60 in tariffs on imports from GSP countries for each $1 in tariffs waived by the program. The Administration could take a number of unilateral steps to increase product coverage without changing the GSP statute.
- The GSP program supports American jobs, exports, investments, but lapsed authorizations undermine such American benefits. The on-again, off-again nature of the GSP program since 2010 helps show the benefits of GSP to American jobs, exports, investments – when in place. Conversely, American jobs, exports, investments, including into research and development, suffer when GSP benefits lapse.
As the Trump administration and Congress work together to develop a new trade policy, it is crucial that organizations continue to educate policymakers about the importance of GSP for American companies and workers. The Coalition strongly encourages importers that benefit from GSP to take action in support of GSP renewal before its rapidly approaching expiration on December 31.