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Tariff Cuts Under Expanded ITA, GSP Changes Effective July 1

Tuesday, July 05, 2016
Sandler, Travis & Rosenberg Trade Report

A presidential proclamation issued June 30 implements the immediate or staged elimination of tariffs on 201 information technology products and makes a number of changes to the goods eligible for duty-free treatment under the Generalized System of Preferences. These changes (see below for a list of GSP-related changes) are generally effective as of July 1.

Expanded ITA. The expanded ITA covers goods such as multi-component semiconductors (MCOs), medical equipment, GPS devices, tools for manufacturing printed circuits, video game consoles, printer ink cartridges, static converters and inductors, loudspeakers, software media (e.g., solid state drives), point-of-sale cards to download software and games, LEDs, touch-sensitive input devices, children’s electronic learning devices, and various information and communications technology testing instruments.

Tariffs on about two-thirds of the covered tariff lines were eliminated as of July 1 and most of the rest will be phased out in annual stages through July 1, 2019, though some will not be fully eliminated for five or even seven years. A list of covered products can be accessed here, and the anticipated U.S. duty phaseout schedule can be found here. However, the annex to the proclamation that will officially make these changes had not been made available at press time.

Goods Added to GSP Eligibility. Designated travel goods under 27 HTSUS subheadings (including luggage, backpacks, handbags and pocket goods such as wallets) have been added to the list of GSP-eligible products but only for least-developed beneficiary developing countries (of which there are currently 43) and African Growth and Opportunity Act beneficiary countries (of which there are currently 38). A decision on whether to extend GSP eligibility to these products when imported from other beneficiaries has been deferred.

Effervescent wine under HTSUS 2204.21.20 from all countries has been added to GSP eligibility. Requests to also extend GSP eligibility to essential oils of lemon under HTSUS 3301.13.00 and ferromanganese containing by weight more than four percent of carbon under HTSUS 7202.11.50 have been deferred.

Goods Removed from GSP Eligibility. The following articles from the countries indicated have been removed from GSP eligibility: fluorescent brightening agent 32 (HTSUS 3204.20.10) and other fluorescent brightening agents (HTSUS 3204.20.80) from India and polyethylene terephthalate resin (HTSUS 3907.60.00) from India. Petitions to remove GSP eligibility for fluorescent brightening agent 32 and other fluorescent brightening agents from Indonesia and non-adhesive plates, sheets, film, foil and strip (HTSUS 3920.62.00 and 3921.90.40) from Brazil were denied.

In addition, the following articles from the countries indicated have been removed from GSP eligibility because they exceeded the applicable competitive need limitation: fruit or vegetable juice (HTSUS 2202.90.36) from the Philippines, iron or steel cast grinding balls and similar articles for mills (HTSUS 7325.91.00) from India, and parts and accessories of motor vehicles of heading 8701 (HTSUS 8708.50.95) from India.

Goods Retaining GSP Eligibility. GSP eligibility for the following products has been continued by waiving the applicable CNLs: pitted dates (HTSUS 0804.10.60) from Tunisia, dead single-cell micro-organisms (HTSUS 2102.20.60) from Brazil, and non-alcoholic beverages other than fruit or vegetable juices of heading 2009 (HTSUS 2202.90.90) from Thailand.

GSP eligibility will also be continued for more than 100 products that have qualified for a waiver of the 50 percent CNL because the value of total imports of each article from all countries during the calendar year did not exceed the applicable de minimis amount ($22.5 million for 2015).

Country Practice Reviews. The following previously accepted country practice petitions remain under review: Ecuador for arbitral awards; Fiji, Georgia, Iraq, the Philippines and Thailand for worker rights; Indonesia, Ukraine and Uzbekistan for intellectual property rights; and Niger and Uzbekistan for worker rights and child labor.

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