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Practice Areas

Expanded GSP Treatment for Travel Goods Sought by Trade Groups

Monday, March 27, 2017
Sandler, Travis & Rosenberg Trade Report

More than a dozen U.S. trade associations are urging President Trump to immediately issue a proclamation extending duty-free treatment for travel goods under the Generalized System of Preferences to all GSP beneficiary developing countries. A June 30, 2016, presidential proclamation added travel goods under 28 HTSUS subheadings (including luggage, backpacks, handbags, and pocket goods such as wallets) to the list of GSP-eligible products but only for least-developed BDCs (of which there are currently 43) and African Growth and Opportunity Act beneficiary countries (of which there are currently 38).

While the associations previously sought expanded eligibility from the Obama administration by emphasizing the benefits for BDCs, the March 20 letter they sent to Trump focuses on his stated intent to use trade policy to more aggressively boost domestic employment and economic growth. The letter asserts that expanding GSP eligibility for these goods to all BDCs “would create new and important U.S. jobs … including those jobs that further process these imported articles.” It would also save the travel goods industry more than $200,000 in duties per day and “relieve financial burdens faced by U.S. consumers … through price reductions and innovation.”

At the same time, the administration has made clear its desire to bring manufacturing jobs back to the U.S. from overseas and the letter implicitly acknowledges that this is not the likely outcome of the change the associations are seeking. The 28 travel goods at issue “have not been made [in the U.S.] for decades,” the letter states, and extending GSP eligibility to these goods from all BDCs would simply shift U.S. sourcing from China to those countries instead of back to the U.S.

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