A number of changes to the Generalized System of Preferences were made in an Oct. 30 presidential proclamation following regular eligibility reviews, product reviews, and beneficiary developing country assessments. These changes include the removal of several products from GSP eligibility, but importers of such goods can use the first sale rule and other methodologies to mitigate the tariff impact of these changes.
For more information on GSP and how these changes may affect your business, please contact David Olave at (202) 730-4960. For more information on the first sale rule, please contact Mark Segrist or Mark Tallo.
Thailand. Effective Dec. 30, 2020, GSP eligibility will be revoked for about one-sixth of eligible products from Thailand (see full list here) representing $817 million in U.S. imports under GSP in 2019. According to the Office of the U.S. Trade Representative, this revocation is based on Thailand’s failure to assure the U.S. that it will provide equitable and reasonable access to its market for pork products.
A previous proclamation revoked GSP eligibility for approximately one-third of eligible products from Thailand (valued at about $1.3 billion).
Laos. USTR announced that Laos will not be designated as a GSP beneficiary at this time, and that it is closing its associated review, following a lack of recent engagement by the government of Laos on the GSP worker rights eligibility criterion.
Country Reviews Closed. USTR has closed with no loss of GSP eligibility reviews for Georgia and Uzbekistan, based on improvements in the protection of worker rights, and Indonesia, based on improvements in market access.
Country Reviews Initiated. USTR has self-initiated country reviews for Eritrea and Zimbabwe based on concerns related to worker rights. The concerns in Eritrea relate to forced labor associated with the country’s national service requirement as well as a lack of freedom of association. Concerns in Zimbabwe relate to a lack of freedom of association, including the rights of independent trade unions to organize and bargain collectively, and government crackdown on labor activists.
Additions/Removals. Effective Nov. 1, fresh-cut roses (HTSUS 0603.11.00) will be added, and parboiled rice (HTSUS 1006.30.10) will be removed, from the list of GSP-eligible articles. Petitions to remove five other types of rice were denied.
Eligibility Continued. GSP eligibility is being continued by granting de minimis waivers from the competitive need limitations for the following products.
- chongos (HTSUS 0406.10.04) from Ecuador
- fresh cut orchids (HTSUS 0603.13.00) from Thailand
- macadamia nuts (HTSUS 0802.61.00) from Brazil
- mace, crushed or ground (HTSUS 0908.22.20) from Indonesia
- sausages (HTSUS 1601.00.40) from Brazil
- sardines (HTSUS 1604.13.90) from Ecuador
- cane/beet sugar (HTSUS 1701.91.42) from Brazil
- cane molasses (HTSUS 1703.10.30) from Brazil
- palm hearts (HTSUS 2008.91.00) from Ecuador
- food preparations (HTSUS 2106.90.03) from Pakistan
- oilcake from extraction of peanut oil (HTSUS 2305.00.00) from Brazil
- chromium trioxide (HTSUS 2819.10.00) from Kazakhstan
- calcium carbide (HTSUS 2849.10.00) from Brazil
- isobutanal (HTSUS 2912.19.40) from Brazil
- leather (HTSUS 4104.41.40) from Argentina
- goat hides and skins (HTSUS 4106.22.00) from Pakistan
- leather (HTSUS 4107.19.80) from Argentina
- articles of catgut (HTSUS 4206.00.13) from Brazil
- furskins (HTSUS 4302.19.45) from Thailand
- furskins (HTSUS 4302.19.60) from Brazil
- blockboard (HTSUS 4412.94.80) from Brazil
- materials of rattan (HTSUS 4601.22.40) from Indonesia
- plaits of vegetable materials (HTSUS 4601.94.05) from Indonesia
- brooms and brushes (HTSUS 9603.10.90) from Sri Lanka
Eligibility Removed. Effective Nov. 1, GSP eligibility has been removed for the following products because they have exceeded the applicable CNLs.
- fresh or chilled taro (HTSUS 0714.40.10) from Ecuador
- methyl tertiary-butyl ether (HTSUS 2909.19.14) from Argentina
- gum, wood, or sulfate turpentine oils (HTSUS 3805.10.00) from Brazil
- plywood sheets (HTSUS 4412.34.32) from Ecuador
- gold necklaces and neck chains (HTSUS 7113.19.29) from Indonesia
- electric generating sets (HTSUS 8502.12.00) from Brazil
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