President Trump has taken steps to ensure the Ukraine and Argentina uphold their commitments to participate in the Generalized System of Preferences (GSP), but the duty-free program will expire at the end of the year without congressional reauthorization.
U.S. President Donald Trump has recently taken steps to enforce eligibility requirements for countries enrolled in a U.S. trade preference program that allows them to export certain products into the United States duty free.
The president partially suspended the Ukraine from the Generalized System of Preferences (GSP) due to its failure to adequately protect intellectual property rights (IPR), despite years of encouragement and assistance from the U.S. government. As part of this suspension, the White House has decided to provide 120 days’ notice, since the Ukrainian government has promised to correct the problem, including toughening the current laws governing royalty reimbursement to right holders’ organizations, the administration said in a statement.
Argentina, on the other hand, will be reinstated to the GSP program starting Jan. 1, following the resolution of certain arbitral disputes with U.S. companies, new commitments by the Argentine government to improving market access for U.S. agricultural products, and improved protection and enforcement of IPR. However, due to certain lingering IPR concerns, the United States at this time will not restore GSP benefits to certain eligible products.
Trump also restored African Growth and Opportunity Act (AGOA) duty-free benefits to Gambia after it lost this eligibility in 2015 due to human rights abuses. Gambia held democratic elections in December 2016, and the Trump administration praised the country for “strengthening the rule of law, improving human rights, and supporting political pluralism.”
Swaziland lost its AGOA eligibility in 2015 due to restrictions on freedoms of speech. The United States set a series of benchmarks for Swaziland to reach in order to have its AGOA benefits restored. According to Trump administration, these benchmarks were achieved by the country in November 2017.
Meanwhile, the Office of the U.S. Trade Representative is conducting a separate AGOA review for Rwanda, Tanzania, and Uganda in response to a petition asserting that their phased ban on imports of used clothing is negatively impacting U.S. jobs. This review is ongoing.
“President Trump has sent a clear message that the United States will vigorously enforce eligibility criteria for preferential access to the U.S. market,” U.S. Trade Representative Robert Lighthizer said of the moves.
“Beneficiary countries choose to either work with USTR to meet trade preference eligibility criteria or face enforcement actions,” he added. “The administration is committed to ensuring that other countries keep their end of the bargain in our trade relationships.”
About 120 developing countries and territories currently participate in GSP. In 2016, the total value of imports that entered the United States under the trade preference program stood at $18.9 billion.
However, GSP is expected to expire on Dec. 31, costing companies that import from GSP countries about $75 million in duties per month until the program is renewed by Congress.
In recent years, Congress has been unable to pass long-term GSP reauthorizations. Businesses argue that between the period when GSP expires and is eventually renewed, they are saddled with costly supply chain disruptions.
Trump enforces GSP as Dec. 31 expiration looms
