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Practice Areas

GSP Compliance is Focus of New USTR Enforcement Effort

Thursday, October 26, 2017
Sandler, Travis & Rosenberg Trade Report

Countries benefiting from the Generalized System of Preferences will be subject to heightened scrutiny under a new initiative announced Oct. 24 by the Office of the U.S. Trade Representative. USTR Robert Lighthizer said this “more proactive process” aims to help “ensure that countries that are not playing by the rules do not receive U.S. trade preferences.”

A major component of the new effort will be for USTR and other relevant federal agencies to review each BDC’s compliance with the 15 GSP eligibility criteria every three years. If a review raises compliance concerns for a particular BDC the White House may self-initiate a full country practice review. The first assessment period will focus on BDCs in Asia, with beneficiaries in other parts of the world to be evaluated in the second and third years of this process. USTR states that these eligibility reviews will complement the existing petition receipt and public input process for country practice reviews, which will remain unchanged.

Also part of USTR’s new enforcement plan is a heightened focus on concluding outstanding GSP cases.

GSP provides duty-free treatment to thousands of products from 120 BDCs, and in 2016 the total value of imports that entered the U.S. under GSP was $18.9 billion. To qualify for GSP preferences BDCs must meet statutorily-established eligibility criteria, including respecting arbitral awards in favor of U.S. citizens or corporations, combating child labor, respecting internationally recognized worker rights, providing adequate and effective intellectual property rights protection, and providing the U.S. with equitable and reasonable market access.

GSP is currently scheduled to expire Dec. 31, 2017. House Ways and Means Committee Chairman Kevin Brady, R-Texas, said this week that a GSP reauthorization bill could be approved by Congress before then.

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