Order Code RL33663
Generalized System of Preferences:
Background and Renewal Debate
Updated January 24, 2007
Vivian C. Jones
Specialist in International Trade and Finance
Foreign Affairs, Defense, and Trade Division

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Generalized System of Preferences: Background and
Renewal Debate
Summary
The Generalized System of Preferences (GSP) provides duty-free tariff
treatment to certain products imported from designated developing countries. The
United States, the European Union, and other developed countries implemented such
programs in the in the 1970s in order to promote economic growth in developing
countries by stimulating their exports. The U.S. program (as established by Title V
of the Trade Act of 1974) was extended until December 31, 2008, in section 8002 of
P.L. 109-432 for all GSP beneficiary countries not covered by the African Growth
and Opportunity Acceleration Act of 2004 (P.L.108-274, extended GSP benefits for
AGOA beneficiary countries through September 30, 2015).
Other bills introduced in the 109th Congress to renew the preference include
H.R. 6346 and H.R. 6142 (Thomas), H.R. 6076 (Rangel), H.R. 5070 (Rangel), S.
3933 (Inhofe), and S. 3904 (Baucus). S. 191 (Smith) sought to extend AGOA-type
benefits to certain Asian and Pacific least-developed countries, including an
extension of GSP for these countries alone.
Since Congress extended the GSP until December 2008, its further extension
will continue to be a legislative issue in the 110th Congress. In addition, the Trade
Subcommittee of the House Ways and Means Committee has included an evaluation
of trade preference programs, including the GSP, as part of its oversight plan for the
110th Congress. In the 109th Congress, renewal of the preference was controversial,
due, in part, to the impasse in multilateral trade talks in the World Trade
Organization Doha Development Agenda (DDA) and the concerns of some
regarding the inclusion of certain more advanced developing countries such as India
and Brazil in the program.
The Bush Administration favored GSP renewal, but also appears willing to
continue to review and modify the program in order to respond to congressional
concerns. To that end, the USTR and other administration officials are examining
whether to limit, suspend, or withdraw the eligibility of 13 major GSP beneficiaries
based on certain criteria. The USTR is also reviewing all 83 current waivers of
automatic competitive need limits (triggered by import volumes) to see if any waivers
should be withdrawn. In addition, petitions for new waivers are being considered as
part of the annual 2006 review of the GSP program.
This report presents, first, a brief history, economic rationale, and legal
background leading to the establishment of the Generalized System of Preferences.
A brief comparison of GSP programs worldwide, especially as they compare to the
U.S. system, is also presented. Second, the U.S. implementation of the GSP is
discussed, along with the present debate surrounding its renewal and legislative
developments to date. Third, an analysis of the U.S. program’s effectiveness and the
positions of various stakeholders are presented. Fourth, possible implications of the
expiration of the U.S. program and other possible options for Congress are discussed.
This report will be updated as events warrant.

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Contents
History and Rationale of the GSP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Economic Basis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
International Legal Framework . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Comparison of International GSP Programs . . . . . . . . . . . . . . . . . . . . . . . . . 8
U.S. Implementation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Beneficiary Countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Reporting Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Least-Developed Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Competitive Need Limits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Rules of Origin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Annual Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Graduation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
109th Congress Developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Legislation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Effectiveness of GSP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Effects on Developing Countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Economic Effects on the U.S. Market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Stakeholders’ Concerns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
“Special and Differential Treatment . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Erosion of Preferential Margins . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Under-Utilization of GSP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Trade as Foreign Assistance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Lower Costs of Imports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Conclusion and Options for Congress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Allow GSP To Expire . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Scrap GSP in Favor of Free-Trade Agreements or Regional
Trading Arrangements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Authorize GSP Only for Least-Developed Countries . . . . . . . . . . . . . . . . . 28
Modify GSP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Restrict Application of Preference . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Expand Application of GSP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
List of Figures
Figure 1. U.S. Imports from GSP Countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
List of Tables
Table 1. GSP Product Imports from Leading BDCs, 2005 . . . . . . . . . . . . . . . . . 31

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Table 2. Leading GSP Beneficiaries and Total, 2005 . . . . . . . . . . . . . . . . . . . . . 32
Table 3. Leading GSP Products in Terms of Value, 2005 . . . . . . . . . . . . . . . . . . 33
Table 4. GSP Least-Developed Beneficiary Developing Countries Not
Covered by AGOA Preference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Table 5. GSP Implementation and Extensions, 1975-2006 . . . . . . . . . . . . . . . . . 35
Table 6. Beneficiary Developing Countries and Regions for Purposes
of the Generalized System of Preferences . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Table 7. Top Five Imports of Leading GSP Beneficiary Countries . . . . . . . . . . . 38

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Generalized System of Preferences:
Background and Renewal Debate
The Generalized System of Preferences (GSP) provides preferential tariff
treatment to certain products imported from designated developing countries. The
United States, the European Union, and other developed countries implemented such
programs in the 1970s in order to promote economic growth in developing countries
by stimulating their exports.
The U.S. program (as established by Title V of the Trade Act of 1974) was
extended through December 31, 2008, in section 8002 of P.L. 109-432. The African
Growth and Opportunity Acceleration Act of 2004 (P.L.108-274) had previously
extended GSP preferences for all beneficiary developing sub-Saharan African
countries under the African Growth and Opportunity Act (AGOA) through
September 30, 2015.1
Since Congress extended the GSP until the end of December 2008, its extension
beyond that date will likely be a legislative issue in the second session of the 110th
Congress. In addition, the Trade Subcommittee of the House Ways and Means
Committee has included an evaluation of trade preference programs, including the
GSP, in its oversight plan for the 110th Congress.
The recently enacted GSP extension, along with renewal of certain other
preferential programs, was included in H.R. 6406 (Thomas, introduced on December
7, 2006), a tariff and trade bill introduced in the post-election session of the 109th
Congress. The bill, as approved by the House, was appended to the engrossment of
the House amendment of the Senate amendment to H.R. 6111 (see Title VIII). The
House and Senate compromise legislation extended the GSP for two years for all
countries, while directing that the President “should” revoke “competitive need
limitation” waivers for certain countries and products.
In the 109th Congress, other bills seeking to renew the preference included H.R.
6346 and H.R. 6142 (Thomas, introduced December 5, 2006, and September 19,
2006, respectively) which would extend the preference with similar conditions as
those specified in H.R. 6406.

Two bills, H.R. 6076 (Rangel, introduced September 15, 2006) and its
companion bill S. 3904 (Baucus, introduced on the same day) sought to renew the
GSP for two years without additional amendments, as did H.R. 5070 (Rangel,
introduced March 30, 2006) which sought a one-year extension. S. 3933 (Inhofe),
1 19 U.S.C. 2466b, as amended by section 7 of the AGOA Acceleration Act of 2004 (P.L.
108-274).

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sought a three-year GSP extension. S. 191 (Smith, introduced January 31, 2005) and
its companion bill H.R. 886 (Kolbe, introduced February 17, 2005) sought to extend
AGOA-type benefits, including the GSP extension, to certain Asian and Pacific least-
developed countries.
This report presents, first, a brief history, economic rationale, and legal
framework behind establishment of the Generalized System of Preferences, and a
brief comparison of GSP programs worldwide. Second, a description of U.S.
implementation of the GSP program is presented, along with recent legislative
developments and the debate surrounding its renewal. Third, an analysis of the U.S.
program’s effectiveness and the positions of various stakeholders are discussed.
Fourth, possible implications of GSP expiration and other options for Congress are
mentioned.
History and Rationale of the GSP
The basic principle behind the GSP is to provide certain goods originating in
developing countries with preferential market access (usually in the form of lower
tariff rates or duty-free status) to developed country markets in order to spur
economic growth. The program was first adopted internationally in 1968 by the
United Nations Conference on Trade and Development (UNCTAD) at the UNCTAD
II Conference.2
Economic Basis
The GSP was established based on an economic theory that preferential tariff
rates in developed country markets could promote export-driven industry growth in
developing countries. It was believed that this, in turn, would help to free
beneficiaries from heavy dependence on trade in primary products, whose slow long-
term growth and price instability contributed to chronic trade deficits.3 It was
thought that only the larger markets of industrialized trading partners were large
enough to provide enough economic stimulus to attain these goals.4
Some economists also mention that the Generalized System of Preferences was
established, in part, as a means of reconciling two widely divergent economic
perspectives of trade equity that arose during early negotiations on the General
2 U.N. Conference on Trade and Development, “About GSP,” at [http://www.unctad.org].
In addition to the United States, the European Union and 11 other industrialized countries
— Australia, Belarus, Bulgaria, Canada, Japan, New Zealand, Norway, Switzerland, and
the Russian Federation — currently have GSP programs.
3 OECD Secretary-General. The Generalized System of Preferences: Review of the First
Decade. Organization of Economic Cooperation and Development, 1983, p. 9 (hereinafter
OECD GSP Review).
4 Ibid.

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CRS-3
Agreement on Tariffs and Trade (GATT).5 Industrialized, developed nations argued
that the most-favored-nation principle6 should be the fundamental principle
governing multilateral trade, while lesser-developed countries believed that equal
treatment of unequal trading partners did not constitute equity and called for “special
and differential treatment” for developing countries. GSP schemes thus became one
of the means of offering a form of special treatment that developing nations sought
while allaying the fears of developed countries that tariff “disarmament” might
create serious disruptions in their domestic markets.7
Due to differences in developed countries’ economic structures and tariff
programs — as well as different domestic industries and products each wanted to
shield from such competition — it proved difficult to create one unified system of
identical tariff concessions. Therefore, the GSP became a system of individual
national schemes based on common goals and principles — each with a view toward
providing developing countries with generally equivalent opportunities for export
growth.8 As a result, the preference-granting countries implemented various
individual schemes of temporary, generalized, non-reciprocal, non-discriminatory
preferences under which tariffs were lowered or eliminated on certain imports from
developing countries.
As a condition for providing such tariff preferences, GSP preference-granting
countries reserved the right to (1) exclude certain countries; (2) determine product
coverage; (3) determine rules of origin governing the preference; (4) determine the
duration of the scheme; (5) reduce any preferential margins accruing to developing
countries by continuing to lower or remove tariffs as a result of multilateral
negotiations; (6) prevent the concentration of benefits among a few countries; and (7)
include safeguard mechanisms or “escape” clauses.9
Although GSP programs were intended to be temporary, an international legal
framework under the GATT (as discussed below) was developed to allow these
programs to continue. Additionally, many developed countries have also decided to
grant additional market access, through GSP or other preferential programs, to
products of countries they designate as least-developed countries (LDCs). At the
sixth World Trade Organization (WTO) Ministerial Conference in Hong Kong in
5 Sapir, A. and L. Lundberg, “The U.S. Generalized System of Preferences and its Impacts,”
in R. Baldwin and A. Krueger (eds.) The Structure and Evolution of Recent U.S. Trade
Policy, Chicago: The University of Chicago Press, 1984.
6 The most-favored-nation principle means that countries must treat imports from other
trading partners on the same basis as that given to the most favored other nation. Therefore,
with certain exceptions (including GSP, regional trading arrangements, and free trade
agreements), every country gets the lowest tariff that any country gets, and reductions in
tariffs to one country are provided also to others. The term “most-favored-nation” has been
changed in U.S. law to “normal trade relations.”
7 OECD GSP Review, p. 11.
8 Ibid., p. 10.
9 Wall, David. “Problems with Preferences.” International Affairs, vol. 47, October 1971,
p. 95.

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December 2005, developed country WTO members and “developing country
members declaring themselves in a position to do so” agreed to deepen this
commitment by providing “duty-free and quota-free market [DFQF] access on a
lasting basis, for all products originating from all least developed countries by 2008
or no later than the start of the implementation period in a manner that ensures
stability, security and predictability.”10 Members “facing difficulties” with providing
such access would be permitted to exempt 3 percent of all tariff lines, provided they
take steps to achieve the goal of total duty- and quota-free access by incrementally
building on the list of covered products.11 Since DDA talks have been suspended,
this duty-free/quota-free offer is in jeopardy.
International Legal Framework12
Because it is a preference program, by its very nature, the GSP posed a problem
under the GATT in that the granting of preferences would be facially inconsistent
with the fundamental obligation placed on GATT Parties in GATT Article I:1 to
grant most-favored-nation (MFN) tariff treatment to the products of all other GATT
Parties. As noted, however, preference programs were viewed as vehicles of trade
liberalization and economic development for developing countries. Thus, GATT
Parties accommodated them in a series of joint actions.
In 1965, the GATT Parties added Part IV to the General Agreement, an
amendment that recognizes the special economic needs of developing countries and
asserts the principle of non-reciprocity. Under this principle, developed countries
forego the receipt of reciprocal benefits for their negotiated commitments to reduce
or eliminate tariffs and restrictions on the trade of less developed contracting
parties.13 Because of the underlying MFN issue, GATT Parties in 1971 adopted a
waiver of Article I for GSP programs, which allowed developed contracting parties
to accord more favorable tariff treatment to the products of developing countries for
ten years.14 The GSP was described in the decision as a “system of generalized, non-
reciprocal and non-discriminatory preferences beneficial to the developing
countries.”
10 World Trade Organization. Ministerial Declaration, Annex F. December 18, 2005,
WT/MIN(05)/DEC.
11 Ibid.
12 This section was written by Jeanne Grimmett, Legislative Attorney, American Law
Division. For further discussion of trade preference programs in light of obligations under
the General Agreement on Tariffs and Trade (GATT), see CRS Report RS22183, Trade
Preferences for Developing Countries and the WTO, by Jeanne J. Grimmett [hereinafter
CRS Report RS22183].
13 Edmond McGovern, International Trade Regulation ¶ 9.212 (updated 1999)[hereinafter
McGovern]. Part IV is generally viewed as non-binding, though some have argued
otherwise with regard to certain of its provisions. Id.; John H. Jackson, William J. Davey
& Alan O. Sykes, Jr., Legal Problems of International Economic Relations 1171 (4th ed.
2002).
14 GATT, Generalized System of Preferences; Decision of 25 June 1971, L/3545 (June 28,
1971), available at [http://www.wto.org/gatt_docs/English/SULPDF/90840258.pdf].

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At the end of the Tokyo Round of Multilateral Trade Negotiations in 1979,
developing countries secured adoption of the Enabling Clause, a permanent deviation
from MFN by joint decision of the GATT Contracting Parties.15 The Clause states
that notwithstanding GATT Article I, “contracting parties may accord differential and
more favourable treatment to developing countries, without according such treatment
to other contracting parties” (¶1) and applies this exception to:
(a) Preferential tariff treatment accorded by developed contracting parties to
products originating in developing countries in accordance with the Generalized
System of Preferences;
(b) Differential and more favorable treatment with respect to the provisions of
the General Agreement concerning non-tariff measures governed by the
provisions of instruments multilaterally negotiated under the auspices of the
GATT;
(c) Regional or global arrangements entered into amongst less-developed
contracting parties for the mutual reductions or elimination of tariffs and, in
accordance with criteria or conditions which may be prescribed by the
CONTRACTING PARTIES for the mutual reduction or elimination of non-tariff
measures, on products imported from one another;
(d) Special treatment on the least developed among the developing countries in
the context of any general or specific measures in favour of developing countries
(¶ 2).
To describe the GSP, the Clause refers to the above-quoted description in the 1971
waiver, i.e., a “system of generalized, non-reciprocal and non-discriminatory
preferences beneficial to the developing countries.”16 Among other things, the
Clause further provides, at ¶ 3(c), that any differential and more favorable treatment
provided under the Clause “shall in the case of such treatment accorded by developed
contracting parties to developing countries be designed and, if necessary, modified,
to respond positively to the development, financial and trade needs of developing
countries.”
In addition, if a GATT Party (now WTO Member) who has instituted a GSP
program subsequently takes action “to introduce modification or withdrawal of the
differential treatment so provided,” the Member is required to notify and consult with
other WTO Members. Specifically, ¶ 4(a) requires the acting Member to notify
WTO Members as a whole and to “furnish them with all the information they may
deem appropriate relating to such action.” Further, under ¶ 4(b), the Member must
“afford adequate opportunity for prompt consultations at the request of any interested
contracting party with respect to any difficulty or matter that may arise.” If requested
by any such interested party, WTO Members must as a whole consult with all WTO
15 GATT, Differential and More Favourable Treatment, Reciprocity and Fuller Participation
of Developing Countries; Decision of 28 November 1979, L/4903 (Dec. 3, 1979)(footnotes
omitted), available at [http://www.wto.org/gatt_docs/English/SULPDF/90970166.pdf]
[hereinafter Enabling Clause].
16 Id. at ¶ 2, note 3.

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CRS-6
Members concerned over the issue at hand with the aim of reaching a solution that
is satisfactory to all such Members. This requirement does not affect any Member’s
rights under the GATT.17
Paragraph 7 of the Clause provides that the less-developed WTO Members
“expect that their capacity to make contributions or negotiated concessions or take
other mutually agreed action under the provisions and procedures of the General
Agreement would improve with their progressive development of their economies
and improvement in their trade situation and they would accordingly expect to
participate more fully in the framework of rights and obligations under the General
Agreement.” This paragraph is generally considered to support the “graduation”of
a beneficiary country out of a grantor’s GSP program by the grantor, either entirely
or with respect to particular products, once the beneficiary country has attained a
certain level of economic development.18 The Enabling Clause does not contain
express criteria or procedures for graduation, however, leaving grantor countries to
establish criteria on a unilateral basis.
The Enabling Clause also states that it “would remain open for the
CONTRACTING PARTIES to consider on an ad hoc basis under the GATT provisions
for joint action any proposals for differential and more favourable treatment not
falling within the scope of this paragraph,” that is, a program that does not fit within
one of the four categories described above.19 This provision suggests the use of
GATT waivers for more ambitious programs; in practice, waivers have been adopted
for a variety of such programs, including several U.S. non-GSP tariff preferences.20
17 Id. at ¶ 4, note 1.
18 Note also ¶ 4 of the Enabling Clause requiring grantors to notify GATT parties in the
event of modification or withdrawal of GSP benefits. See generally Simon Lester, The
Asian Newly Industrialized Countries to Graduate from Europe’s GSP Tariffs, 36 Harv. Int’l
L. J. 220 (1995); Gregory O. Lunt, Graduation and the GATT: The Problem of the NICs, 31
Colum. J. Transnat’l L. 611 (1994); Robert E. Hudec, GATT and the Developing Countries,
1992 Colum. Bus. L. Rev. 67.
19 Enabling Clause, supra note 15, at ¶ 2, note 2.
20 CRS Report RS22183, supra note 12, at 3-4. The United States has pending waiver
requests for the Caribbean Basin Economic Recovery Act, as amended by the United States-
Caribbean Trade Partnership Act (through September 30, 2008), the Andean Trade
Preference Act, as amended by the Andean Trade Promotion and Drug Eradication Act
(through December 31, 2006), and the African Growth and Opportunity Act (through
September 30, 2015). Some WTO Members, e.g., China and Pakistan, have expressed
concerns regarding U.S. treatment of textiles in these programs, while Paraguay has objected
to the U.S. request in part because of its exclusion from the Andean preference scheme. See
Goods Council approves waiver for EC’s trade preference scheme for the Western Balkans,
WTO News Item, July 18, 2006, at [http://www.wto.org/english/news_e/news06_e/
gc_july06_e.htm]; Minutes of the Meeting of the Council for Trade in Goods, May 9, 2006,
at 3-11, G/C/M/84 (June 29, 2006); Minutes of the Meeting of the Council for Trade in
Goods, March 10, 2006, at 3-13, G/C/M/83 (May 1, 2006).

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The Enabling Clause was incorporated into the GATT 1994 upon the entry into
force of the Uruguay Round agreements on January 1, 1995.21 In 1999, the WTO
General Council adopted a decision, captioned “Preferential Tariff Treatment for
Least-Developed Countries,” which waived GATT Article I:1 until June 30, 2009,
“to the extent necessary to allow developing country Members to provide preferential
tariff treatment to products of least-developed countries, designated as such by the
United Nations, without being required to extend the same tariff rates to like products
of any other Member.”22 Along with setting out various standards and notification
and procedural requirements, the waiver also provides that it “does not affect in any
way and is without prejudice to rights of Members in their actions pursuant to” the
Enabling Clause.”23
In addition, in a WTO dispute proceeding brought by India challenging special
GSP benefits maintained by the European Communities (EC), European
Communities — Conditions for the Granting of Tariff Preferences to Developing
Countries (WT/DS246), the WTO Appellate Body addressed the issue of the extent
to which a granting country may accord such benefits within a GSP program to
countries meeting a separate set of criteria. The dispute stemmed from an EC
Regulation which awarded tariff preferences to a closed group of 12 beneficiary
countries on the condition that they combat illicit drug production (Drug
Arrangements). India claimed that the Drug Arrangements were inconsistent with
GATT Article I:1 and could not be justified by the Enabling Clause. In its 2004
report, the Appellate Body ruled that developed countries may grant preferences
beyond those provided in their GSP to countries with particular needs, but only if
identical treatment is available to all similarly situated GSP beneficiaries.24 Among
other things, the Appellate Body cited ¶ 3(c) of the Enabling Clause, providing that
any differential and more favorable treatment provided under the Clause “shall ... be
designed and, if necessary modified to respond positively to the development,
financial and trade needs of developing countries.”25
21 Agreement Establishing the World Trade Organization, Annex 1A, General Agreement
on Tariffs and Trade 1994, ¶ 1(b)(iv); see Appellate Body Report, European Communities
— Conditions for the Granting of Tariff Preferences to Developing Countries, ¶ 90.3,
WT/DS246/AB/R (Apr. 7, 2004)[hereinafter EC Preferences Appellate Body Report].
22 Preferential Tariff Treatment for Least-Developed Countries; Decision on Waiver,
WT/L/304 (June 17, 1999)(adopted June 15, 1999), at [http://docsonline.wto.org/
DDFDocuments/t/WT/L/304.DOC][hereinafter 1999 LDC Waiver]; see also discussion in
WTO Committee on Trade and Development, Note on the Meeting of 2 March 1999, at 2-6,
WT/COMTD/M/24 (Apr. 27, 1999).
23 1999 LDC Waiver, supra note 22, at ¶ 6.
24 EC Preferences Appellate Body Report, supra note 21. For further discussion of the
Appellate Body report, see CRS Report RS22183, supra note 12, at 4-6.
25 EC Preferences Appellate Body Report, supra note 21, at ¶¶ 162-165.

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Comparison of International GSP Programs
One economist has referred to the Generalized System of Preferences as a non-
homogeneous set of national schemes sharing certain common characteristics.26
Generally, each preference-granting country extends to qualifying beneficiary
developing countries (as determined by each benefactor) an exemption from duties
(either reduced tariffs or duty-free access) on most manufactured products and certain
“non-sensitive” agricultural products, although product coverage and preferential
treatment vary widely.27
Although most GSP schemes (including the U.S. program) admit eligible
products duty-free, some countries provide tariff reductions, rather than complete
exemption from duties.28 The Australian system, for example, is based on a five
percentage point margin of preference. When the Australian General Tariff (GT) is
5 percent or higher, the amount of the tariff is reduced by 5 percent for products of
beneficiary countries. When the GT rate is 5 percent or less, the preferential rate is
zero.29
In the WTO, developing country status is generally based on self-determination.
However, with regard to GSP, each preference-granting country establishes particular
criteria and conditions for defining and identifying developing country beneficiaries.
Consequently, the list of beneficiaries and exceptions may vary greatly between
countries. If political changes have taken place in a beneficiary country, the country
might be excluded from GSP programs in some countries (such as the United States)
but not in others. Most countries exclude countries if they have entered into another
kind of commercial arrangement (e.g. a free trade agreement) with any other GSP-
granting developed country.
In terms of additional GSP product coverage for LDCs, the European
Community program, which offers duty-free access or reduced tariffs for “everything
but arms,”30 is currently perhaps the most inclusive. GSP-granting countries may
also have incentive-based programs that provide enhanced benefits for beneficiary
countries that meet certain additional criteria. For example, the European
Community recently implemented a preference that grants additional GSP benefits
26 Sanchez Arnau, Juan C. The Generalized System of Preferences and the World Trade
Organization. London: Cameron May, Ltd., 2002, p. 187.
27 Ibid.
28 World Trade Organization. Committee on Trade and Development. The Generalized
System of Preferences: A Preliminary Analysis of the GSP Schemes in the Quad. WTO
Document WT/COMTD/W/93, October 5, 2001.
29 United Nations Conference on Trade and Development. Generalized System of
Preferences on the Scheme of Australia. UNCTAD Technical Cooperation Project on
Market Access, Trade Laws and Preferences, June 2000 (INT/97/A06), p. 5.
[http://www.unctad.org/en/docs/itcdtsbmisc56_en.pdf].
30 European Communities. See Council Regulation (EC) N° 980/2005 of 27 June 2005
applying a scheme of generalized tariff preferences (published in Official Journal of the
European Communities (OJ) L 169, 30.6.2005, p. 1.

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CRS-9
to those countries that have demonstrated their commitment to sustainable
development and internationally recognized worker rights.31
Each preference-granting nation also has safeguards in place to ensure that any
significant increases in imports of a certain product do not adversely affect the
receiving country’s domestic market. Generally, these restrictions take the form of
quantitative limits on goods entering under GSP. Under Japan’s system, for
example, imports of certain products under the preference are limited by quantity or
value (whichever is applicable) on a first-come, first-served basis as administered on
a monthly (or daily, as indicated) basis. For other products, import ceilings and
maximum country amounts are set by prior allotment.32
Each GSP benefactor also has criteria for graduation — the point at which
beneficiaries no longer qualify for benefits because they have reached a certain level
of development. Most preference-granting countries require mandatory graduation
based on a certain level of income per capita based on World Bank calculations.
Some programs also “graduate” certain GSP recipients with respect to individual
products or sectors of the economy.
U.S. Implementation
Congress authorized the U.S. Generalized System of Preferences scheme in
Title V of the Trade Act of 1974 (P.L. 93-618), as amended.33 It authorizes the
President to grant duty-free treatment under the GSP for any eligible product from
any beneficiary developing country (BDC) or least-developed beneficiary developing
country, provides the President with economic criteria in deciding whether to take
any such action,34 and also specifies certain criteria for designating eligible countries
and products.
Based on the statutory requirements which countries must meet — and continue
to practice — while participating in the program, the U.S. GSP program might be
characterized as a foreign policy tool as well as an international trade device.
Although GSP benefits are non-reciprocal, certain criteria speak to important U.S.
commercial interests, such as ensuring “equitable and reasonable” access in the
beneficiaries’ market to U.S. products, protecting intellectual property rights, and
preventing the seizure of property belonging to U.S. citizens or businesses. In
addition, since certain “import sensitive” products are excluded from eligibility and
31 Ibid.
32 World Trade Organization. Committee on Trade and Development. Notification by Japan
June 21, 2000, WT/COMTD/N/2/Add.9.
33 Trade Act of 1974, P.L. 93-618, Title V, as amended, 19 U.S.C. 2461-2467. The GSP
Program was reauthorized and amended by the Trade and Tariff Act of 1984 (P.L. 98-573),
and again by Subtitle J (the GSP Renewal Act of 1996) of Public Law 104-188. Six laws
have authorized GSP with relatively minor modifications, most recently through December
31, 2006 (PL. 107-210). See Table 4, “GSP Implementation and Extension, 1975-2002.”
34 19 U.S.C. 2461.

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quantitative/value limitations apply to any eligible imports, the economic costs of the
preference are quite small.
Beneficiary Countries
When designating beneficiary developing countries, the President is directed to
take into account certain mandatory and discretionary criteria. The law prohibits
(with certain exceptions) the President from extending GSP treatment to certain
countries, as follows:
! other industrial countries;
! Communist countries, unless they are a WTO member, a member of
the International Monetary Fund and receive Normal Trade
Relations (NTR) treatment;
! countries that collude with other countries to withhold supplies or
resources from international trade or raise the price of goods in a
way that could cause serious disruption to the world economy;
! countries that provide preferential treatment to the products of
another developed country in a manner likely to have an adverse
impact on U.S. commerce;
! countries that nationalize or expropriate the property of U.S.
citizens, or otherwise infringe on U.S. citizens’ property rights
(including failure to recognize or enforce arbitral awards in favor of
U.S. citizens or corporations);
! countries that grant sanctuary from prosecution to any individual or
group that has committed an act of international terrorism, or has not
taken steps to support U.S. efforts against terrorism;
Mandatory criteria also require that beneficiary countries:
! have taken or be taking steps to grant internationally recognized
worker rights (including collective bargaining, freedom from
compulsory labor), minimum age for employment of children, and
acceptable working conditions with respect to minimum wages,
hours of work, occupational safety and health); and
! implement any commitments they make to eliminate the worst forms
of child labor.35
35 19 U.S.C. 2462(b). The most recent amendments required the support of U.S. efforts
against terrorism and expanded the definition of internationally recognized worker rights
(sec. 4102 of P.L. 107-210). See also United States Trade Representative. U.S. Generalized
System of Preferences Guidebook, January 2006, p. 19. (Hereinafter, USTR Guidebook.)

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CRS-11
The President is also directed to consider certain discretionary criteria, such as
the following:
! the country’s desire to be designated a beneficiary developing
country for purposes of the U.S. program;
! the level of economic development of the country;
! whether or not other developed countries are extending similar
preferential tariff treatment;
! its commitment to a liberal trade policy;
! the extent to which it provides adequate protection of intellectual
property rights;
! the extent to which it has taken action to reduce trade-distorting
investment policies and practices; and
! whether or not it has taken steps to grant internationally recognized
worker rights.36
The law authorizes the President, based on the required and discretionary factors
mentioned above, to withdraw, suspend or limit GSP treatment for any beneficiary
developing country at any time.37
Reporting Requirements. The President must advise Congress of any
changes in beneficiary developing country status, as necessary.38 The President must
also submit an annual report to Congress on the status of internationally recognized
worker rights within each BDC, including findings of the Secretary of Labor with
respect to the beneficiary country’s implementation of its international commitments
to eliminate the worst forms of child labor.39
Least-Developed Beneficiaries. The President is also authorized by statute
to designate any BDC as a least-developed beneficiary, based on an assessment of the
conditions and factors previously mentioned.40 Therefore, although factors such as
per capita income level, economic stability, and quality of life indicators (on which
the United Nations-designated list of LDCs is based) are taken into account,41 the
U.S. administration also assesses the level of compliance with other GSP statutory
36 19 U.S.C. 2462(c). Ibid., p. 20.
37 19 U.S.C. 2462(d).
38 19 U.S.C. 2462(d)(3).
39 19 U.S.C. 2464.
40 19 U.S.C. 2462(a)(2).
41 19 U.S.C. 2462(c)(2).

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CRS-12
requirements and comments from the public before identifying a country as “least-
developed” for purposes of the GSP.42

As requested by the WTO, the Bush Administration has formally notified its
trading partners of all the domestic legislative and regulatory steps necessary in order
to comply with the duty-free/quota-free access (DFQF) provision agreed to at the
Hong Kong Ministerial. However, the United States also advised other WTO
members that implementation of the initiative is contingent on successful completion
of negotiations in the Doha Development Agenda.43
Products
The Trade Act of 1974 restricts the President’s discretion in designating eligible
products. Certain “import sensitive” articles, including textiles and apparel; certain
watches; footwear and other accessories; certain electronics, steel, and glass
products; and certain agricultural products subject to tariff-rate quotas, are
automatically excluded from GSP treatment.44 The lists of eligible products and
beneficiary developing countries are reviewed and revised annually by the GSP
Subcommittee.45 Any modifications usually take effect on July 1 of the following
calendar year.46
In terms of product coverage, more than 3,400 products are currently eligible for
duty-free treatment, and 1,400 additional articles from least-developed BDCs may
receive similar treatment.47 Leading imports in 2005 (see Table 1) included
petroleum products, especially crude oil ($5.7 billion); jewelry and jewelry parts
($3.4 billion); automobile and other passenger vehicle parts ($1.43 billion);
ferroalloys ($669.0 million); and rubber tires ($629.3 million).
Competitive Need Limits. The law establishes “competitive need limits”
(CNL) which require the President to automatically suspend GSP treatment if imports
of a product from a single country reach a specified threshold value ($120 million in
2005), or if 50% or more of total U.S. imports of a product come from a single
country.48
42 See 71 F.R. 43543.
43 World Trade Organization. Committee on Trade and Development. “Duty-Free, Quota-
Free Access for Least-Developed Countries.” Communication from the United States, May
16, 2006. WT/COMTD/W/149.
44 19 U.S.C. 2463(b).
45 The GSP Subcommittee is a sub-group of the Trade Policy Staff Committee, given
jurisdiction over designating beneficiary countries and covered products in the GSP program
in Executive Order 11846, 40 F.R. 14291, as amended.
46 USTR Guidebook, p. 8.
47 USTR Guidebook, p. 6.
48 19 U.S.C. 2463(c)(2)(A). USTR Guidebook, p. 10.

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The President may grant a CNL waiver for a product imported from a BDC. In
deciding whether to grant a waiver, the President must (1) receive advice from the
International Trade Commission as to whether a U.S. domestic industry could be
adversely affected by the waiver, and (2) determine that the waiver is in the U.S.
economic interest, and (3) publish the determination in the Federal Register.49 The
President is also required to give “great weight” to the extent to which the BDC
opens its markets and resources the United States, provides internationally
recognized worker rights, and protects intellectual property rights.50

All competitive need limitations are automatically waived for least-developed
and sub-Saharan African beneficiaries.51 A waiver may also be provided (in some
cases automatically) if total U.S. imports of a product from all countries is small or
“de minimis” ($17.5 million in 2005),52 or if the GSP-eligible article was not
produced in the United States on January 1, 1995.53
Rules of Origin. Eligible goods must also meet certain domestic content or
“rules of origin” requirements in order to qualify for GSP status. According to the
statute, duty-free entry is only allowed if the article is imported directly from the
beneficiary country into the United States. In addition, at least 35% of the appraised
value of an eligible product must be the “growth, product or manufacture” of a
beneficiary developing country, as defined by the sum of (1) the cost or value of
materials produced in the beneficiary developing country (or any two or more
beneficiary countries that are members of the same association or countries and are
treated as one country for purposes of the U.S. law) plus (2) the direct costs of
processing in the country.54 Any inputs from third countries must be “substantially
transformed” into new and different constituent materials if they are to be considered
part of the 35 percent domestic content rule.55
Annual Review
The U.S. GSP program is subject to annual review by the GSP Subcommittee
of the Trade Policy Staff Committee (TPSC), a body chaired by the Office of the U.S.
Trade Representative (USTR), and including representatives from the Departments
of Agriculture, Commerce, Interior, Labor, State, and the Treasury.56 The GSP
49 19 U.S.C. 2463(d).
50 19 U.S.C. 2463(d)(2).
51 19 U.S.C. 2462(c)(2)(D). USTR Guidebook, p. 11.
52 19 U.S.C. 2463(c)(2)(F).
53 19 U.S.C. 2463(c)(2)(E).
54 19 U.S.C. 2463(a).
55 19 U.S.C. 2463(a)(2) and (3).
56 Regulations for implementation of the GSP program were issued by the Office of the
United States Trade Representatives at 15 C.F.R. Part 2007. Provisions for the GSP Annual
Review are set out at 15 C.F.R. § 2007.2(c)-(h). Results of the most recent (2005) annual
(continued...)

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Subcommittee considers and makes recommendations to the President concerning
the eligibility of countries to receive, or continue to receive, benefits; resolves
questions regarding BDC’s observance of country practices (such as worker rights,
or protection of intellectual property rights); investigates petitions to add or remove
items from the list of eligible products; and considers which products should be
removed on the basis that they are “sufficiently competitive” or “import sensitive.”
In preparation for the annual review, the USTR may also seek an investigation by the
International Trade Commission (ITC) for the purpose of providing advice
concerning any possible modifications to the GSP.57 The TPSC initiated the 2006
Annual Review on October 6, 2005, and announced a second phase on August 8,
2006.58 On January 17, 2007, the USTR announced that the GSP Subcommittee had
received petitions for CNL waivers in connection with the 2006 review, and
requested public comment.59
Graduation
The President may remove a beneficiary developing country from GSP
eligibility because the country is determined to be sufficiently competitive or
developed that it no longer requires GSP benefits. The President may graduate a BDC
completely, or may do so with respect to the country’s individual products or
industries. Mandatory country graduation occurs when (1) the BDC is determined
to be a “high income country” (as defined by official International Bank for
Reconstruction and Development statistics), or (2) as a result of a review of the
BDC’s advances in economic development and trade competitiveness.60 The last
beneficiaries to graduate from the GSP program were Bulgaria and Romania,
“effective for each of the countries when it becomes a European Member State” as
of January 1, 2007 (Presidential Proclamation 8098, December 29, 2007).61
109th Congress Developments
In previous years that the GSP was set to expire, its subsequent renewal was
generally considered non-controversial. Even when the preference was allowed to
lapse, it was widely expected that Congress would retroactively renew the preference
56 (...continued)
review of products entering under GSP were announced on July 5, 2006 (71 F.R. 38190).
Results of the 2005 annual review are available on the USTR home page at
[http://www.ustr.gov/Trade_Development/Preference_Programs/GSP/Section_Index.html].
57 19 U.S.C. 1332(g), 19 U.S.C. 2463
58 70 F.R. 58502 and 71 F.R. 45079, respectively.
59 72 F.R. 2033. The list of petitions is posted at [http://www.ustr.gov/assets/
Trade_Development/Preference_Programs/GSP/asset_upload_file19_10292.pdf].
60 19 U.S.C. 2462(e).
61 72 F.R. 459. USTR officially announced the graduation of Bulgaria and Romania on
January 22, 2007 (72 F.R. 2717).

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CRS-15
as it did in the Trade Act of 2002.62 In 2006, however, renewal of the program was
a matter of some debate and speculation.
As early as January 2006, then-Senate Finance Committee Chairman Chuck
Grassley commented that renewal of GSP was “not a foregone conclusion” and that
its extension was likely to be tied to the United States receiving certain reciprocal
benefits as part of a successful conclusion of the Doha Round of trade talks.63 In his
opening statement at the hearing for USTR nominee Susan Schwab in May 2006,
Senator Grassley repeated these concerns, mentioning especially India and Brazil,
two major beneficiaries of the GSP that he perceived as “two of the countries most
responsible for holding up the Doha negotiations.”64 On that basis, he warned that
he might oppose GSP renewal as a result of their obstruction, or make sure that
eligibility requirements are tightened so that more advanced developing countries,
such as India and Brazil, are removed from the program.65 Finance Committee staff
mentioned that the chairman might be in favor of renewing the program for least-
developed beneficiaries, however.66 On September 19, 2006, Then-Senate
Agriculture Committee Chairman Saxby Chambliss also called for USTR Schwab
to consider revising the GSP program to exclude advanced developing countries such
as Brazil and India.67
Then-House Ways and Means Committee Chairman Bill Thomas introduced a
bill (H.R. 6406) on December 7, 2006, seeking to renew the GSP program for two
years.68 The bill language, reached in compromise with the Senate, amended the
statute to direct that not later than July 1 of each year, the President “should” revoke
any existing CNL waiver that has been in effect for five years or more, if a
beneficiary country has exported a quantity of the article that (1) has an appraised
value in the previous calendar year that exceeds 150% of an annually-set trade cap,
or (2) exceeds 75% of the value of total U.S. imports of that product.69
62 In each instance since 1993 (the last that the program has expired, it has been allowed to
lapse and has been extended retroactively from the expiration date to the date of enactment.
P.L. 107-210 applied the preference to any goods entering between September 30, 2001, and
August 6, 2002. See Table 4, “GSP Implementation and Extension, 1975-2002.”
63 “Sen. Grassley Warns of Expiration of Unilateral Trade Preference Programs,”
International Trade Daily, January 26, 2006.
64 Senate. Committee on Finance. Hearing on the Nomination of Susan C. Schwab to be
United States Trade Representative. Opening Statement of Senator Chuck Grassley. May
16, 2006.
65 Ibid.
66 Conversation with Senate Finance staff, April 26, 2006.
67 Senate. Committee on Agriculture. Letter from Chairman Saxby Chambliss to U.S. Trade
Representative Susan Schwab, September 19, 2006.
68 House. Committee on Ways and Means. Summary of H.R. 6406.
[http://www.waysandmeans/house/gov].
69 Section 8001 of P.L. 109-432.

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Ways and Means Committee staff indicated that these limitations were based
on ensuring that (1) all BDCs are given an equitable portion of trade preferences
accruing from the United States and (2) BDCs share similar goals with regard to
trade liberalization.70 Passage of the measure was delayed, largely because certain
Members in support of the U.S. textile industry were concerned about a provision
also included in the bill that would allow Haiti, as well as African countries, to
import yarn from third countries and then sell duty-free apparel made with this yarn
to the United States.71
Others in Congress, including then-House Ways and Means Ranking Member
Charles Rangel and then-Senate Finance Committee Ranking Member Max Baucus
introduced legislation to extend the GSP and other preferential programs for a short-
term extension of the GSP while Congress continued to deliberate and hold hearings
on possible amendments on it and other preferential tariff programs.
USTR Schwab publicly called for GSP renewal, but also signaled that the Bush
Administration was willing to make modifications to the program to address
congressional concerns. In early August, the USTR requested public comments
“relating to whether the Administration’s operation of the program should be
changed so that benefits are not focused on a few countries and that developing
countries that have not been major traders under the program receive benefits.”72 To
that end, the TPSC announced its plan to review whether to limit, suspend, or
withdraw the eligibility of some major beneficiaries, including Argentina, Brazil,
Croatia, India, Indonesia, Kazakhstan, Philippines, Romania, Russia, South Africa,
Thailand, Turkey, and Venezuela on the grounds that in 2005 (1) the total value of
U.S. imports under GSP for each of these countries exceeded $100 million or (2) is
classified by the World Bank as an upper-middle-income economy or accounted for
more than 0.25% of world goods exports.73 The committee is also reviewing all 83
existing competitive need limitation waivers to see if any of them should be
withdrawn due to changed circumstances.74
According to the GSP statute, the President has the authority to revise country
eligibility criteria and allowable tariff lines (except for statutorily excluded products)
without congressional action. The administration stated that its favored approach
was to graduate individual industry sectors within countries (as opposed to entire
countries) from receiving GSP benefits.75 However, when announcing the second
70 Comments at meeting of International Section of the District of Columbia Bar
Association, September 21, 2006.
71 Van Dongen, Rachael, “Rankled by Trade Measure, North Carolina Lawmakers Delay
House Action,” CQ Today, September 25, 2006.
72 71 F.R. 45079.
73 71 F.R. 45079.
74 Ibid.
75 “Schwab Calls for GSP Extension, Signals Openness to Some Changes,” Inside U.S.
Trade, August 4, 2006. The USTR probably referred to a larger number of countries, rather
than India and Brazil alone because, in order to be compliant with U.S. obligations under
(continued...)

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phase of the review in early August 2006, USTR Schwab’s remarks indicated that the
administration was responding to congressional concern by stating “one of the
concerns that Congress has raised is that GSP benefits go largely to a few countries,
while many developing countries are not trading much under the program. We want
to ensure that we are operating the program as Congress intended.”76 Some industry
officials reportedly saw this review as the USTR’s way of “controlling the situation”
by showing Congress that it already had the ability to make radical changes to the
program, thus attempting to forestall additional reform legislation.77
With regard to the competitive need limitation provisions included in P.L. 109-
432, the USTR indicated that it “expects to issue a Federal Register notice in late
February 2007, when full-year 2006 data are available, that will identify those
waivers that meet either of the new thresholds and thus subject to potential
revocation.” As of October 2006 (latest trade data available), a preliminary
assessment of the CNL waivers meeting the new statutory thresholds are: Brazil —
brakes and brake parts ($242 million) and ferrozirconium ($ 0.7 million); Cote
d’Ivoire — kola nuts ($4 million); India — gold jewelry ($1.6 billion) and brass
lamps ($20 million); Philippines — wiring harnesses ($329 million); Thailand —
gold jewelry ($611 million); and Venezuela — methanol ($242 million).78
The USTR is also in the process of considering, as part of its 2006 GSP Annual
Review, petitions for additional CNL waivers, modifications to the list of products
eligible, and the status of certain GSP beneficiaries because of country practices.79
Legislation
H.R. 6406 (Thomas, introduced December 7, 2006) sought to renew the GSP
program for two years. The bill also sought to amend the GSP statute by giving the
President discretion, after a six-month period, to revoke CNL waivers under certain
conditions. H.R. 6406, as approved by the House by a vote of 212-184, was
appended to the engrossment of the House amendment of the Senate amendment to
H.R. 6111 (see Title VIII).80 H.R. 6111 was passed in the Senate by unanimous
consent on December 7, 2006, and signed by the President on December 20, 2006
(became P.L.109-432).
75 (...continued)
the GATT, the same criteria for graduating countries from the GSP preference must be
applied to all countries.
76 U.S. Trade Representative. “Administration to Review Whether to Continue Trade
Benefits under the GSP Program,” Press Release, August 7, 2006 [http://www.ustr.gov].
77 “Schwab Calls for GSP Extension, Signals Openness to Some Changes,” Inside U.S.
Trade, August 4, 2006.
78 U.S. Trade Representative. “Ambassador Schwab Announces Process to Respond to
Congressional Changes to GSP Program.” Press Release, December 20, 2006.
79 72 F.R. 2033.
80 Pursuant to section 2 of H.Res. 1100, the rule providing for its consideration.

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H.R. 6346 (Thomas, introduced December 5, 2006) sought to renew the GSP
program for two years. The bill also sought amend the GSP statute by limiting the
application of CNL waivers as of January 1, 2007, for certain countries and products.
S. 3933 (Inhofe, introduced September 25, 2006), sought to renew the GSP for
three years. The measure also sought to amend the factors affecting country
designation to include “the country’s position and level of cooperation with the
United States in multilateral trade negotiations.”
H.R. 6142, Title II (Thomas, introduced September 20, 2006), sought to renew
the GSP program for two years. The bill would also have prohibited the application
of CNL waivers as of January 1, 2007 for certain products and countries. The bill
also sought to extend for two years a fabric provision in AGOA that allows sub-
Saharan beneficiaries to use fabric from third countries in their duty-free exports to
the United States, as well as extend similar benefits to Haiti.
H.R. 6076 (Rangel, introduced September 15, 2006), the Emergency Trade
Program Extension Act of 2006, and its companion bill, S. 3904 (Baucus, introduced
the same day) seek to extend the GSP program, the Andean Trade preference, and
preferential treatment of apparel articles from AGOA countries for two years. The
bills also would require hearings in the relevant House and Senate committees on the
future and efficacy of trade preference programs, as well as their compatibility with
U.S. WTO obligations.
H.R. 5070 (Rangel, introduced March 30, 2006), the Trade Preference
Extension and Expansion Act of 2006, sought to renew the GSP program for one year
(until December 31, 2007) and implement the duty-free quota-free initiative with
respect to certain textiles, apparel, and agricultural products.
S. 191 (Smith, introduced January 31, 2005), the Tariff Relief Assistance for
Developing Economies (TRADE) Act, and its companion bill H.R. 886 (Kolbe,
introduced February 17, 2005) sought to extend AGOA-type benefits to Asian and
Pacific least-developed countries. It would have, subject to an import sensitivity test
by the ITC, include as eligible for duty-free access watches, import-sensitive
electronic, steel, and glass articles; footwear; handbags; and luggage. It would also
have provided duty-free and quota-free benefits for textiles and apparel similar to the
benefits provided by AGOA. The 15 countries designated to receive benefits were
Afghanistan, Bhutan, Bangladesh, Cambodia, East Timor, Samoa, Solomon Islands,
Sri Lanka, Tuvalu, Vanuatu, Yemen, Kiribati, Laos, Maldives, and Nepal.
Effectiveness of GSP
The statutory goals of the GSP are, in part, to (1) promote the development of
developing countries, (2) promote trade, rather than aid, as a more efficient way of
promoting economic development, (3) stimulate U.S. exports in developing country

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markets, and (4) promote trade liberalization in developing countries.81 It is difficult
to assess whether or not the program has achieved these goals, however, because the
GSP is only one of many such foreign aid initiatives employed by the United States
to assist poorer countries. Economic success within countries is also related to
internal factors, such as stability, wise policy decisions, availability of infrastructure
to foster industry, and legal/financial frameworks that encourage foreign investment.
What follows, therefore, are general comments, rather than hard data, about the
impact of GSP on developing countries, and possible economic effects on the U.S.
market. The positions of various stakeholders regarding the value of the program are
also discussed.
Effects on Developing Countries

In the last ten years, total U.S. imports from BDCs have increased dramatically,
from $107.8 billion in 1996 to $278.0 billion in 2005 (see Figure 1). This may
indicate, in very general terms, that the GSP and other preferential programs have
helped create some export-driven growth in developing countries. Total exports
entering under the preference have also increased markedly, from $11.6 billion in
1996 to $26.7 billion in 2005. However, the percentage of goods entering the United
States under the GSP program, relative to total U.S. imports from BDCs, has
remained relatively flat at around 10%. This may be due, in part, to the presence of
automatic competitive need limits (absent a CNL waiver) on GSP-eligible products,
and mandatory graduation of countries from the program.
Another indicator of the GSP’s impact on developing countries is the utilization
rate of the preference. At first glance, it seems that only a few beneficiary developing
countries use GSP to a great extent. For example, in 2005, only 21 of the 135 GSP-
eligible countries actually exported more than $100 million worth of goods to the
United States under the preference (see Table 6, below). However, as one study
points out, the apparent lack of utilization masks the fact that many GSP-eligible
goods may also be imported duty-free under other U.S. preference schemes, such as
AGOA. The study also illustrated that, for certain industries in BDCs, the positive
impact of GSP is quite significant. For example, for all agricultural commodities
eligible for GSP treatment, the GSP utilization rate was approximately 58 percent.82
Therefore, for individual industries in developing countries, the positive impact of
the GSP might be seen as quite significant.
81 Public Law 98-573, section 501(b), 19 U.S.C. 2461 note. Additional factors are to allow
for differences in developing countries; help developing countries generate foreign exchange
reserves, further integrate developing countries into the international trading system; and
encourage developing countries to eliminate trade barriers, guard intellectual property rights,
provide worker rights; and address concerns of the United States with regard to adverse
affects on U.S. producers and workers and compliance with GATT obligations.
82 Organization for Economic Cooperation and Development (OECD). Agriculture and
Food. Preferential Trading Arrangements in Agricultural and Food Markets The Case of the
European Union and the United States: United States Preference Schemes. Volume 2005,
No. 1, p. 81.

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Figure 1. U.S. Imports from GSP Countries
300
Source: ITC Trade Dataweb
250
Total U.S. Imports from
GSP Countries
200
150
100
50
Total U.S. Imports Entering
under GSP
0
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Many developing countries with a natural competitive advantage in certain
products use trade preferences such as the GSP to gain a foothold in the international
market. For example, India and Thailand have well-established jewelry industries,
and Argentina enjoys an advantage in certain leather goods that are imported under
the preference. Exporters in these industries have been able to expand their
international reach through GSP programs. On the other hand, some countries may
be encouraged by preferential programs to develop industry sectors where they will
never be able to compete, thus diverting resources from other industries that might
actually become competitive over time (trade diversion).83 Although the costs of
trade diversion are real, empirical evidence suggests that the overall effects of GSP
are relatively small.84
The lack of reciprocity in the GSP program could also result in long-term costs
for beneficiary countries. In multilateral trade negotiations, such as the DDA,
countries may engage in reciprocal tariff reductions, meaning that all parties agree
to reduce their tariffs. By avoiding such reciprocal concessions, some developing
countries may have tended to keep in place protectionist trade policies that may, in
fact, impede their long-term growth. Moreover, these preferences can become an
impediment to negotiations as developing countries seek ways of maintaining their
preferences from eroding.
83 OECD. “Making Open Markets Work for Development.” Policy Brief, October 2005, p.
2.
84 Laird, Samuel and Andre Sapir. Tariff Preferences. In Finger, J. Michael and Andrzej
Olechowski, eds. The Uruguay Round: A Handbook on the Multilateral Trade Negotiations.
Washington, World Bank, 1987, p. 105.

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CRS-21
For this reason, many economists prefer multilateral, nondiscriminatory tariff
cuts because preferential tariff programs, such as the GSP, can lead to inefficient
production and trade patterns. When tariffs are reduced across-the-board, rather than
in a preferential manner, countries tend to produce and export on the basis of their
comparative advantage — thus exporting products that they produce relatively
efficiently and importing products that others produce relatively efficiently.
However, while some developing country producers (especially those whose products
do not qualify under GSP) may benefit from multilateral tariff reductions, other
industries may be hurt because their margin of preference under GSP is reduced.
Economic Effects on the U.S. Market
Overall effects of the GSP on the U.S. economy are relatively small. Imports
under the program in 2005 represented about $26.7 billion, in comparison to total
U.S. imports of $1.6 trillion — or about 1.6 percent. In addition, the rate of increase
of imports entering under GSP in the past ten years is relatively flat (see Figure 1),
indicating that there may be little impact on the U.S. market as a whole by extending
the preference. In federal budgetary terms, the Congressional Budget Office (CBO)
estimates that revenue losses through forgone tariff receipts would amount to about
$3.1 billion if GSP were extended from 2007 to 2011.85
U.S. producers of import-competing products are largely protected from severe
economic impact. First, certain products, such as textiles and apparel, are designated
“import sensitive” and therefore ineligible for duty-free treatment. Second,
“competitive need limits” (discussed in more detail above) are triggered when
imports of a product from a single country reach a specified threshold value or when
50% of total U.S. imports of a product come from a single country.86 Third, U.S.
producers may petition the USTR that GSP treatment granted to eligible articles be
withdrawn.87 The fact that, as illustrated in Figure 1, the dollar amount of imports
entering under GSP has remained fairly level for at least the past 10 years may also
indicate that the GSP has little impact on most domestic producers.
Many U.S. manufacturers and importers benefit from the lower cost of
consumer goods and raw materials imported under the GSP program. U.S. demand
for certain individual products, such as jewelry, leather, and aluminum, is quite
significant.88 However, it is difficult to gauge, other than anecdotally, the overall
85 Congressional Budget Office. The Budget and Economic Outlook: Fiscal Years 2007 to
2016, Table 4.10., “Effects of Extending Tax Provisions Scheduled to Expire Before 2016.”
CBO estimates that revenue losses would be %0.3 billion in FY2006, $0.6 billion in FY2007
and 0.7 billion in 2008 and 2009. Estimates are based on the assumption that the quantity
of imports under the preference will increase over the term, but do not take into account any
possible lowering of tariffs or reductions in value of imports.
86 19 U.S.C. 2463(c).
87 15 C.F.R. 2007.0(b).
88 In some product categories, imports under GSP account for 25 percent or more of total
U.S. imports, including leather (45 percent of all U.S. leather imports), jewelry and jewelry
(continued...)

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CRS-22
impact of the GSP program on the U.S. market when compared to similar imports
from other countries that do not receive the preference. It is possible that some
merchandise entering under the GSP could be competitive even without the
preference, but it is also possible that the duty-free status is the primary factor that
makes imports from these countries more attractive.
Stakeholders’ Concerns
Supporters of the GSP include beneficiary developing country governments and
exporters, U.S. importers, and some U.S. manufacturers who use inputs entering
under GSP in downstream products. Some policymakers favor GSP renewal
because they believe it is an important development and foreign policy tool. Those
who oppose the program include U.S. producers who manufacture competing
products, and some in Congress who favor more reciprocal approaches to trade
policy. What follows is a thematic approach to the major topics of discussion in the
GSP renewal debate.
“Special and Differential Treatment.” Developing countries have long
maintained that “special and differential treatment,” such as that provided by the
GSP, is an important assurance of access to U.S. and other developed country
markets in the midst of increasing globalization.89 Many of these countries have built
industries (or segments of industries) based on receiving certain tariff preferences.
Those who oppose automatic renewal of GSP have expressed the desire to see
some “reciprocity” and “appreciation” on the part of BDCs — in the form of offers
of improved market access — in return for renewal of the program.90 Some of these
policy makers favor continued progress in bilateral or multilateral negotiations in
lieu of extending automatic, nonreciprocal benefits such as the GSP. Others have
also charged some of the more advanced BDCs for obstructing multilateral trade
talks, especially in the WTO Doha Round.
Some observers have stated that many in Congress are becoming more skeptical
about the efficacy of any further trade concessions as they hear from constituents
about lost jobs and other domestic hardships attributed to global competition.91 Other
88 (...continued)
parts (43 percent), ferroalloys (36 percent), copper wire (25 percent), and aluminum (25
percent).
89 Women in International Trade (WIIT) Event. The Value of Attending a World Trade
Organization Ministerial Conference, January 20, 2006.
90 “Sen. Grassley Warns Brazil, India, on GSP; Stops Short of Predicting Graduation,”
Inside U.S. Trade, May 19, 2006. “Thomas Urges USTR to Shift from Lagging Doha Round
to Completing FTAs.” Inside U.S. Trade, April 7, 2006.
91 Washington International Trade Association (WITA) event. “The 2006 Congressional
Trade Agenda,” February 15, 2006.

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CRS-23
Members believe that extension and expansion of these programs “will send a signal
to developing countries that we will stand with them as they grow.”92
Erosion of Preferential Margins. Developing countries have expressed
concern about the overall progressive erosion93 of preferential margins as a result of
across-the-board tariff negotiations within the context of multilateral trade
negotiations such as the Doha Round. In 1997, a study prepared by the Organization
for Economic Cooperation and Development (OECD) found that the degree of
erosion of preferences resulting from Uruguay Round (1986-1994) tariff concessions
by the Quad countries (Canada, European Union, Japan, United States) was indeed
significant.94 Some economists point out that if multilateral rounds of tariff
reductions continue, the preference may disappear completely unless GSP tariff
headings are expanded to include more “import-sensitive” products.95
Other economists say that preference erosion could be more than outweighed
by the benefits of increased market access, even for developing countries, brought
about by multilateral trade liberalization.96 These economists say that, rather than
continuing GSP and other preferential programs (either through inertia or concern
that removing them would be seen as “acting against” the world’s poorest
populations), a better approach might be to “assist them in addressing the constraints
that really underlie their sluggish trade and growth performance.”97
Under-Utilization of GSP. Some who oppose the program say that the
proportionately small amount of trade entering under the GSP means that the
program is under used, and therefore can be easily eliminated. Some supporters
agree that this is especially true for many least-developed country beneficiaries, who
historically are not large users of the preference.
Some in Congress favor graduating some of the more advanced BDCs, thinking
that this would leave more room for other countries, especially LDCs, to take greater
92 “Rangel Bill Would Extend Trade Benefits for Developing Countries,” Press Release,
March 30, 2006.
93 While overall multilateral preferences may be eroding, the tariff benefits for individual
items is still quite significant. For example, the U.S. tariff on flashlights (eligible for duty-
free access for all BDCs) is 12.5 percent ad valorem. Some GSP-eligible jewelry items have
tariffs as high as 13.5 percent.
94 Organization for International Cooperation and Development. Market Access for the
Least-Developed Countries: Where are the Obstacles? Published by World Trade
Organization, WT/LDC/HL/19*, October 21, 1997, Table 12, p. 47. The study estimated
that in 1997, the loss in the Canadian market was approximately 71 percent, in the EU 26
percent, in Japan 34 percent, and in the United States, 50 percent. (Hereinafter, OECD
study).
95 Sanchez Arnau, p. 282.
96 Baldwin, R.E. and Murray, T. “MFN Tariff Reductions and Developing Country Trade
Benefits Under the GSP,” Economic Journal 87:345, March 1977, p. 46.
97 OECD study, p. 27.

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CRS-24
advantage of the program.98 However, some U.S. business interests have indicated
that, absent GSP eligibility, importers are likely to seek out the best alternative source
for the goods — which would probably be China.99
Some observers have also suggested that the GSP may not be used by some
countries due to unfamiliarity with the program, or because some BDC governments
do a poor job of promoting the existence of available opportunities under the
preference.100 Such problems could be addressed through U.S. trade capacity
building efforts.
Trade as Foreign Assistance. The GSP program is supported by many
observers who believe that it is an effective, low-cost means of providing economic
help to developing countries. They maintain that encouraging trade by private
companies through the GSP stimulates economic development much more effectively
than intergovernmental aid and other means of assistance.101 Economic development
assistance through trade is a long-standing element of U.S. policy, and other trade
promotion programs such as the AGOA and the Caribbean Basin Trade Partnership
Act (CBTPA) are also based on this premise. However, no other U.S. preference
program is more broadly based or encompasses as many countries as the GSP.
Conditionality of Preferences. Additionally, some supporters of the GSP
and other non-reciprocal preferences believe that the conditions (such as worker
rights, intellectual property requirements, or drug eradication) incumbent on
developing countries if they are to qualify for GSP status provide the United States
with international political leverage that can be used to preserve U.S. foreign and
commercial interests.102
However, some beneficiary countries actively object to these “country practice”
provisions and regard them as penalties.103 Some countries (such as Brazil and India)
currently targeted for eligibility review perceive that such action indicates that they
are being penalized for advocating for their own national development goals in
multilateral talks.104
Moreover, intellectual property industry representatives, worker rights groups,
and other constituencies in the United States sometimes oppose, in their view, the
98 “USTR Considers Withholding Trade Benefits from India, Brazil in Wake of WTO
Debacle,” International Trade Daily, August 9, 2006.
99 Comments of various industry representatives, District of Columbia Bar International
Section meeting on GSP, September 21, 2006.
100 GAO Report, p. 61.
101 Ibid.
102 The Coalition for GSP. The U.S. Generalized System of Preferences Program: An
Integral Part of the U.S. Economy. January 1997, p. 3.
103 GAO Report, p. 100.
104 September 6, 2006 public comment letter to USTR from ActionAid International USA
[http://www.ustr.gov].

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CRS-25
U.S. administration’s allegedly inconsistent enforcement of these provisions.105 For
example, one lobbying group expressed that they were “shocked and dumbfounded”
that the GSP is being annually renewed for such countries as Brazil, Venezuela, and
Russia in spite of intellectual property rights violations.106 This domestic opposition
may indicate that, at times, the conditionality of the preferences is of limited
usefulness.
Lower Costs of Imports. U.S. importers of goods who import components,
parts, or materials duty-free under the GSP maintain that the preference results in
lower costs for these intermediate goods which, in turn, can be passed on to
consumers. In a May 1, 2006 letter to the House Ways and Means and Senate
Finance committees, a coalition of importers and retailers warned that if the GSP was
allowed to expire, or if its benefits were reduced, it “would impose a costly hardship
on not only beneficiary countries but their American customers as well.”107 Industry
representatives mentioned that smaller domestic manufacturers who regularly import
inputs under the preference may be especially affected by a lapse or expiration of the
program because they are less able to adjust to the increased costs that would
result.108
On the other hand, even though most U.S. producers are shielded by the
automatic safeguards triggered by increased imports under the GSP, some U.S.
manufacturers and workers might be adversely affected by the program due to CNL
waivers.109 For example, in 2004, three U.S. producers of titanium complained that
the Bush Administration refused to terminate duty-free market access for wrought
titanium (ordinarily subject to a 15 percent duty assessment), despite a petition asking
the government not to waive the import limits. Russian imports of titanium were
allowed to continue to enter duty-free under the Presidential waiver even though its
sales made up more than 60 percent of U.S. imports.110
Conclusion and Options for Congress
The U.S. program (as established by Title V of the Trade Act of 1974) was
extended for all countries (for which it had not previously been extended) through
December 31, 2008, in section 8002 of P.L. 109-432. The African Growth and
Opportunity Acceleration Act of 2004 (P.L.108-274) had previously authorized an
extension of GSP preferences for all beneficiary developing sub-Saharan African
105 See GAO Report, Chapter 5, p. 97 ff.
106 “Grassley Throws up Obstacle to Trade-Preference Renewal.” Congress Daily,
September 18, 2006.
107 “U.S. Retailers, Importers Push for GSP Renewal Despite Opposition,” Inside U.S.
Trade, May 5, 2006.
108 Discussion with officials of the Joint Industry Group, August 18, 2006.
109 19 U.S.C. 2463(c).
110 “Administration Decides to Keep Russian GSP Benefits for Titanium,” Inside U.S. Trade,
July 9, 2004.

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countries under the African Growth and Opportunity Act (AGOA) through
September 30, 2015.111 The extension in the 109th Congress represented the first time
since 1984 that the program had been extended without a lapse (see Table 5).
In the 110th Congress, the House Ways and Means Trade Subcommittee has
included an evaluation of effectiveness of the GSP and other trade preference
programs in its oversight plan. In addition, since Congress extended the GSP until
December 2008, renewal beyond that date is likely to be a legislative issue for the
second session.
Several options are available to Congress with respect to the treatment of the
GSP program. As explained more fully below, Congress could allow the GSP
program to expire, support reciprocal tariff and market access benefits through free
trade agreements, renew the GSP for least-developed beneficiaries only, renew the
existing program for all beneficiaries without major amendments, or extend the
program in a modified form. Although the GSP is a unilateral and non-reciprocal
tariff preference, any changes to the program would need to be considered in light of
the requirements of the WTO Enabling Clause, as it has been interpreted by the WTO
Appellate Body. At a minimum, the United States would need to notify and possibly
consult with other WTO Members regarding any withdrawal or modification of GSP
benefits, as required by ¶ 4 of the Clause. The United States could also pursue a
WTO waiver were any modifications of the GSP program considered not to comport
fully with U.S. WTO obligations.
Allow GSP To Expire
The GSP statute will automatically expire for all beneficiary developing
countries on December 31, 2008,112 except for all beneficiary sub-Saharan African
countries, for which the preference is authorized through September 30, 2015.113 No
legislative action would be required to pursue this option.
Before the preference was renewed in 2006, some believed that if the GSP were
renewed, it might spur positive movement in the WTO Doha Development Agenda.
This position was presented by then-House Ways and Means Chairman Bill Thomas
and then-Senate Finance Committee Chairman Chuck Grassley.114 A similar position
was also advocated in early 2002 when, while testifying on intellectual property
issues, then-USTR Robert B. Zoellick mentioned that “the threat of loss of GSP ...
benefits has proven to be an effective point of leverage with some of our trading
111 19 U.S.C. 2466b, as amended by section 7 of the AGOA Acceleration Act of 2004 (P.L.
108-274).
112 19 U.S.C. 2465.
113 19 U.S.C. 2466b, as amended by section 7 of the AGOA Acceleration Act of 2004 (P.L.
108-274).
114 “Thomas Urges USTR to Shift from Lagging Doha Round Completing FTAs,” Inside
U.S. Trade, April 7, 2006.

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partners.”115 Since India and Brazil (major recipients of GSP preferences and two of
the primary advocates for developing nations in the WTO talks) faced expiration of
the preference, some asserted that they might have been moved closer to the U.S.
position in the negotiations. Due to the ongoing USTR review and the bill language
suggesting certain criteria for limiting CNL waivers, these countries may still lose
these waivers for some (or all) products, or be graduated from the GSP program
despite its extension.
On the other hand, country graduation, limitations on CNL waivers, or other
modifications to the GSP program could also weaken the hand of U.S. negotiators
in the DDA because it could no longer be used as an incentive for participation.
Many developing nations already perceive the United States as generally unwilling
to accept multilateral efforts to grant additional “special and differential treatment”
for developing country WTO members (an important DDA goal) unless more
reciprocal concessions for improved market access are made for U.S. products. As
a result, GSP expiration could cause the negotiating positions of developing countries
to harden, rather than soften, as they seek to make up for these lost benefits through
the negotiations.
The United States could also lose substantial leverage in addressing important
trade-related foreign policy and development concerns that beneficiary nations must
accept prior to BDC designation. Currently, interested parties may file petitions
requesting the USTR to review the GSP status of BDCs based on these statutory
criteria (e.g. worker rights practices). If the program were no longer in effect, these
avenues of encouraging certain developing country practices would no longer be
available.116
Some domestic manufacturers, such as the U.S. automobile industry, may be
adversely impacted by GSP expiration or modification, at least in the short term, due
to dependence on duty-free (thus lower-cost) manufacturing inputs imported under
the preference. Smaller businesses could be disproportionately affected because they
are less able to adjust to increased costs of factors of production. On the other hand,
some U.S. manufacturers of import-competing products might, at least marginally,
benefit.
Some least-developed GSP recipients could be harmed substantially by GSP
expiration or other legislative changes. For example, Equatorial Guinea (95% of its
exports, mostly petroleum products, enter under GSP in 2005) and Angola (48% of
its exports to the United States entered under GSP), both sub-Saharan African
countries not designated recipients under the AGOA preference,117 are both least-
developed GSP beneficiaries. Other BDCs or regions with a significant percentage
of U.S. trade entering under the GSP in 2005 included Yemen (least-developed,
115 U.S. Senate, Committee on Foreign Relations. “Examining the Theft of American
Intellectual Property at Home and Abroad.” Hearing, February 12, 2002, S. Hrg. 107-457
116 15 C.F.R. 2007.0(b).
117 See 66 F.R. 49059.

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CRS-28
about 74%), the West Bank (74%), Zimbabwe (64%), Armenia (59%), Paraguay
(52%), Mozambique (least-developed, 51%), and Norfolk Island (51%).
Scrap GSP in Favor of Free-Trade Agreements or Regional
Trading Arrangements
Some in Congress have suggested that the GSP should be abandoned in favor
of free trade agreements (FTAs) or regional trading arrangements (RTAs) that would
provide the United States with reciprocal benefits. Such arrangements could provide
additional markets for U.S. exports, as well as stimulate the growth of industries in
developing-country trading partners. Thus, U.S. exporters, as well as importers,
could benefit from reciprocal tariff concessions. Since these tariff concessions under
these agreements would probably apply to many more goods and industries than are
covered by the existing GSP program, they might increase the likelihood of across-
the-board economic stimulation in the developing country trading partner. In
addition, absent a favorable conclusion to the DDA negotiations, FTAs and RTAs
could also be used as a way to lead countries toward further multilateral trade
liberalization.
However, such reciprocal agreements could actually harm import-competing
U.S. manufacturers more than unilateral preferences under the GSP, because
automatic safeguards written into the statute, such as competitive need limitations,
might no longer apply. Any such agreement could also involve a greater number of
U.S. tariff concessions, thus certain import-sensitive items ineligible for GSP status
could also be on the table. On the other hand, other U.S. manufacturers might benefit
from the increased market access that an FTA or RTA would provide.
Some developing countries could also be put at a greater disadvantage in an
FTA or RTA because they are ill-equipped to implement the additional standards that
accompany a comprehensive U.S. free trade agreement118 Indeed, some countries
such as South Africa and other countries in the South African Customs Union
(SACU) have failed to reach FTAs with the United States due to inability to reach
these standards. In addition, since the GSP is the largest U.S. preferential trading
program, some developing countries that currently receive GSP benefits could easily
be left out of such agreements, either because their markets are of little commercial
value to U.S. interests, or because time constraints involved in the negotiating
process do not make it worthwhile for U.S. negotiators to include them.
Authorize GSP Only for Least-Developed Countries
Some in Congress favor modifying the GSP so that it applies only with respect
to least-developed BDCs. Since many African least-developed beneficiaries will
continue to receive the GSP preference until mid-2015 under AGOA, an LDC-only
GSP extension would apply only to the following 20 countries: Afghanistan, Angola,
Bangladesh, Bhutan, Burkina Faso, Burundi, Cambodia, Central African Republic,
118 Vamvakidis, Ahtanasios. “Regional Trade Agreements or Broad Liberalization: Which
Path Leads to Faster Growth?” IMF Staff Papers, Vol. 46:1, March 1999, p. 42.

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Comoros, Congo (DROC), Equatorial Guinea, Haiti, Kiribati, Nepal, Samoa,
Somalia, Togo, Tuvalu, Vanuatu, and Yemen.
Of these countries, only seven (Afghanistan, Angola, Congo (DROC),
Equatorial Guinea, Samoa, Somalia, and Yemen) export goods that account for more
than 10% of total U.S. imports under the program. Therefore, if the preference were
extended to LDCs only (absent any other modifications), these countries, at least
initially, would be the primary recipients to benefit.
Modify GSP
Another possible approach for Congress would be to modify the Generalized
System of Preferences scheme as it applies to all beneficiary developing countries,
including least-developed countries.
Restrict Application of Preference. The following is a list of possible
approaches if Congress desired to extend, but further restrict, imports under the GSP:
! Refine statutory criteria for GSP treatment. For example, make the
existing discretionary criteria mandatory requirements.
! Strengthen the requirement that benefits under the preference may
(or must) be terminated for non-compliance with mandatory or
discretionary criteria. Add additional criteria to include movement
toward sustainable development or environmental preservation.
! Reconsider criteria for graduation of countries from GSP, or
strengthen the provision that allows graduation of individual
industries within beneficiary countries. For example, the President
could be required to grant BDC status only if a country (1) complies
with all mandatory requirements and (2) has a per-capita income
below a certain level.
! Modify the rules of origin requirement for qualifying products to
require that a greater percentage of the direct costs of processing
operations (currently 35%)119 originate in beneficiary developing
countries.
! Lower the threshold at which the President may (or must) withdraw,
suspend, or limit the application of duty-free treatment of certain
products (competitive need limitation).120
119 19 U.S.C. 2463(a)(2)(A)(ii)(II). The statute further specifies that a product may be made
in one BDC or any two or more such countries that are members of the same association of
countries and are treated as one under section 19 U.S.C. 2467(2). For beneficiary countries
under AGOA, this percentage may also include up to 15 percent (as to value) of U.S. origin
(19 U.S.C. 2466a(b)(2)).
120 19 U.S.C. 2463(c).

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! Require the President to more frequently and actively monitor
(currently an annual process) the economic progress of beneficiary
countries, as well as compliance with mandatory and discretionary
criteria.
! Weed out countries considered “unfriendly” to U.S. interests, such
as Venezuela, India, and Brazil.
Expand Application of GSP. Were Congress to expand or enhance
application of the GSP, the following options could be exercised:
! Expand the list of tariff lines permitted duty-free access. Allow
some “import sensitive” products (in which developing countries
often have a competitive advantage) to receive preferential access.
! Improve rule of origin requirements to provide more predictability.
Current rules provide no measurable definition of “substantial
transformation,” therefore, U.S. officials often make eligibility
decisions on a case-by-case basis; therefore BDCs sometimes have
no predictable way of knowing before shipment whether certain
foreign components can be included as part of the 35 percent
domestic content.121
! Eliminate competitive need limitations or raise the thresholds that
trigger them.
! Ensure uniform application of country practice requirements, or
eliminate them.

121 GAO Report, p. 55.

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Appendix
Table 1. GSP Product Imports from Leading BDCs, 2005
Value of
GSP Country
MFN
Country
Value of Total
HTS No.
Description
Share of
Tariff
Imports under
U.S. Imports
Total U.S.
Rate
GSP
(actual U.S. $)
Imports
(actual U.S. $)
India
7113195000
5.5% Gold or platinum jewelry, whether
$1,594,212,535
$5,820,529,111
27.4%
plated or not, not otherwise
specified or indicated (nesoi)
8708997360
2.5% Parts for steering systems other than
$62,061,994
$1,098,906,905
5.7%
assemblies with a universal joint, of
motor vehicles 8701 to 8705
7113192900
5.5% Gold necklaces and chains, nesoi
$59,676,268
$947,604,632
6.3%
8409999190
2.5% Parts, exc conn rods, for
$55,322,659
$814,644,227
6.8%
compression-ignition internal
combustion piston engines for road
tractors, motor buses, automobiles,
or trucks
7113115000
5.0% Silver jewelry, articles and pts incl
$53,063,273
$869,768,368
6.1%
pr mtl pltd silvr val ov $18 per
dozen pieces or parts
Brazil
8708395050
2.5% Brakes and servo-brakes, nesoi, of
$173,646,624
$2,525,693,996
6.9%
the motor vehicles 8701 to 8705
8503009545
3.0% Parts of generators (other than
$119,178,277
$471,763,363
25.3%
commutators)
7403110000
1.0% Refined copper cathodes and
$107,809,048
$3,238,489,287
3.3%
sections of cathodes
7408116000
3.0% Refined copper wire with a
$106,757,090
$1,369,512,698
7.8%
maximum cross-sectional dimension
of over 6mm but not over 9.5mm
4412194031
8.0% Plywood 1 outer ply long leaf/short
$93,504,843
$215,508,500
43.4%
leaf/southern yellow/slash/pitch/VA
pine both outer plys of softwood
Thailand
7113195000
5.5% Gold or platinum jewelry, whether
$590,713,403
$869,768,368
67.9%
plated or not, nesoi
8528122800
3.9% Reception appar for TV, non-hi def,
$170,286,335
$476,837,647
35.7%
color, single picture tube, direct
view, display exceeding 35.56cm
incorporating video record or
reproduction apparatus
7113115000
5.0% Silver jewelry, articles and pts incl
$82,155,831
$869,768,368
9.5%
pr mtl pltd silvr val ov $18 per
dozen pieces or parts
4011201015
4.0% New pneumatic tires, of rubber,
$78,906,171
$1,349,223,229
5.9%
radial, used on bus/truck, on
highway, except light trucks
4414000000
3.9% Wooden frames for paintings,
$66,409,628
$405,370,252
16.4%
photographs, mirrors, or similar
objects
Source: CRS calculations based on data from USITC Trade Dataweb [http://dataweb.usitc.gov]. See appendix for top
five imports from all major GSP beneficiaries (imports of more than $100 million) in 2005.
Note: Imports for consumption, actual U.S. dollars. Tariff rates are ad valorem unless otherwise specified.

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Table 2. Leading GSP Beneficiaries and Total, 2005
Beneficiary
Total Imports
GSP Duty-Free Imports
Rank
Developing Country
($ millions)
($ millions)
1
India
18,807
4,179
2
Angola
8,484
4,098
3
Brazil
24,437
3,628
4
Thailand
19,892
3,575
5
Indonesia
12,017
1,594
6
Equatorial Guinea
1,562
1,487
7
Turkey
5,177
1,068
8
South Africa
5,865
1,017
9
Philippines
9,248
1,008
10
Venezuela
33,965
745
Imports from Top 10
139,454
22,399
Beneficiaries
Total Imports from all
278,029
26,747
Beneficiaries
Source: U.S. International Trade Commission Dataweb ([http://dataweb.usitc.gov]).

---

CRS-33
Table 3. Leading GSP Products in Terms of Value, 2005
GSP
Share of
HTS MFN Tariff
Value of GSP
Value of Total
Description
Total
No.
Range
Imports
U.S. Imports
Imports
(%)
2709 5.25 cents -
Petroleum
$5,676,744,001 $137,330,950,177
4.13%
10.5 cents
products, crude
per barrel
7113 5% - 13.5%
Articles of
$3,432,539,826
$7,966,197,641
43.09%
jewelry and
parts thereof
8708 0% - 2.5%
Automobile and $1,304,001,568
$40,263,875,773
3.24%
other passenger
vehicle parts
7202 0% - 10%
Ferroalloys
$668,752,557
$1,834,158,364
36.46%
4011 0% - 4%
New pneumatic
$629,332,578
$7,414,981,951
8.49%
rubber tires
7606 2.7% - 6.5%
Aluminum
$629,332,578
$2,568,158,339
24.51%
plates, sheets,
and strip
2905 0% - 5.5%
Acyclic
$539,396,958
$2,245,535,285
24.02%
alcohols and
derivatives
6802 1.9% - 6.5%
Worked
$471,457,609
$2,666,550,863
17.68%
monumental or
building stone
8544 0% - 5.3%
Insulated
$445,645,627
$10,612,025,120
4.20%
electrical wire
and cable
7408 1% - 3%
Copper wire
$387,934,509
$1,558,731,998
24.89%
3923 3% - 5.3%
Plastics for
$304,214,039
$4,376,765,968
6.95%
storage or
packing
4418 0% to 4.8%
Builder’s
$292,373,755
$2,691,280,919
10.86%
joinery and
carpentry of
wood
4107 0% - 5%
Leather of
$290,666,125
$647,947,394
44.86%
bovine or
equine animals
8501 0% - 6.7%
Electric motors
$289,714,460
$4,978,011,363
5.82%
and generators
4412 0% - 8%
Plywood panels
$288,294,294
$2,299,518,720
12.54%
and other
veneered wood
Source: CRS calculations based on data from USITC Trade Dataweb [http://dataweb.usitc.gov].
Note: Imports for consumption, actual U.S. dollars. Tariff rates are ad valorem unless otherwise
specified.

---

CRS-34
Table 4. GSP Least-Developed Beneficiary Developing
Countries Not Covered by AGOA Preference
Income
All Imports To
% of
Imports under
Country
Per Capita
United States
Imports
GSP (2005)
(2003)
(2005)
under GSP
Afghanistan
NA
$67,310,191
$11,487,004
17%
Angola $975
$8,466,134,125
$4,098,197,449
48%
Bangladesh
$376
$2,692,443,030
$21,442,691
1%
Bhutan
$797
$615,516
$11,050
2%
Burkina
Faso
$345
$2,084,203
$122,216
6%
Burundi
$83
$4,423,229
$0
0%
Cambodia
$315
$1,767,086,372
$4,335,692
0%
Cen African
Rep
$309
$5,696,947
$0
0%
Comoros
$538
$1,444,743
$0
0%
Congo
(DROC)
$107
$246,134,201
$49,841,306
20%
Equatorial
Guinea
$5,900
$1,561,518,969
$1,487,456,698
95%
Haiti
$346
$447,103,788
$1,724,979
0%
Kiribati
NA
$1,104,581
$0
0%
Nepal
$237
$111,064,220
$3,411,300
3%
Samoa
$1,505
$7,937,575
$3,420,064
43%
Somalia
NA
$307,638
$31,312
10%
Togo
$362
$6,439,273
$140,975
2%
Tuvalu
NA
$56,868
$0
0%
Vanuatu
$1,348
$2,489,141
$49,564
2%
Yemen
$565
$280,388,747
$207,004,509
74%
Source: CRS calculations based on USITC Trade Dataweb ([http://dataweb.usitc.gov]).

---

CRS-35
Table 5. GSP Implementation and Extensions, 1975-2006
Public Law
Effective Date
Date Expired
Notes
P.L. 93-618, Title V,
January 2, 1975
January 2, 1985
Statute originally enacted.
Trade Act of 1974
P.L. 98-573, Title V,
October 30, 1984
July 4, 1993
Substantially amended and
Trade and Tariff Act of 1984
restated.
P.L. 103-66, Section 13802
August 10, 1993
September 30, 1994
Extended retroactively from
(in Omnibus Budget
July 5, 1993 to August 10,
Reconciliation Act, 1993)
1993. Also struck out
reference to “Union of Soviet
Socialist Republics”
P.L. 103-465, Section 601
December 8, 1994
July 31, 1995
Extended retroactively from
Uruguay Round Agreements
September 30, 1994 to
Act
December 8, 1994. No other
amendments to provision.
P.L. 104-188, Subtitle J,
October 1, 1996 (for
May 31, 1997
Substantially amended and
section 1952
GSP renewal only)
restated. Extended
GSP Renewal Act of 1996 (in
retroactively from August 1,
Small Business Job Protection
1995 to October 1, 1996.
Act of 1996)
P.L. 105-34, Subtitle H,
August 5, 1997
June 30, 1998
Extended retroactively from
section 981
May 31, 1997 to August 5,
(in Taxpayer Relief Act of
1997. No other amendments
1997)
to provision.
P.L. 105-277, Subtitle B,
October 21, 1998
June 30, 1999
Extended retroactively from
section 101
July 1, 1998 to October 21,
(in Omnibus Consolidated and
1998. No other amendments
Emergency Supplemental
to provision.
Appropriations, 1999)
P.L. 106-170, section 508,
December 17, 1999
September 30, 2001
Extended retroactively from
(in Ticket to Work and Work
July 1, 1999 to December 17,
Incentives Act of 1999)
1999. No other amendments
to provision.
P.L. 107-210, Division D,
August 6, 2002
December 31, 2006
Extended retroactively from
Title XLI
September 30, 2001 to
Trade Act of 2002
August 6, 2002. Amended to
(1) include requirement that
BDCs take steps to support
efforts of United States to
combat terrorism and (2)
further define the term
“internationally recognized
worker rights.”
P.L. 109-432, Title VIII
December 31, 2006
December 31, 2008
Extended before program
lapse.

---

CRS-36
Table 6. Beneficiary Developing Countries and Regions for
Purposes of the Generalized System of Preferences
(as of August 1, 2006)
Independent Countries
Afghanistan +
Gambia, The +
Philippines
Albania
Georgia
Russia
Algeria
Ghana
Rwanda + G
Angola + G
Grenada E
St. Kitts and Nevis E
Argentina
Guinea + G
Saint Lucia E
Armenia
Guinea-Bissau + G
Saint Vincent and the
Grenadines E
Bangladesh +/
Guyana E
Samoa +
Belize E Haiti
+ E
Sao Tome and Principe + G
Benin G
India
Senegal G
Bhutan +
Indonesia
Serbia and Montenegro
Bolivia J
Iraq
Seychelles G
Bosnia and Herzegovina
Jamaica E
Sierra Leone + G
Botswana G
Jordan
Solomon Islands
Brazil
Kazakhstan
Somalia +
Burkina Faso + G
Kenya G
South Africa G
Burundi + G
Kiribati +
Sri Lanka
Cambodia+
Kyrgyzstan
Suriname
Cameroon G
Lebanon
Swaziland G
Cape Verde + G
Lesotho + G
Tanzania +
Central African Republic +
Liberia +
Thailand
Chad +
Macedonia, Former Yugoslav
Togo +
Republic of
Colombia J
Madagascar + G
Tonga
Comoros +
Malawi + G
Trinidad and Tobago
Congo (Brazzaville) G
Mali G
Tunisia
Congo (Kinshasa) +
Mauritania + Turkey
Costa Rica E
Mauritius G
Tuvalu +
Cote d’Ivoire
Moldova
Uganda + G
Croatia
Mongolia
Ukraine
Djibouti +
Mozambique + G
Uruguay
Dominica E
Namibia G
Uzbekistan
Dominican Republic E
Nepal +
Vanuatu +
East Timor +
Niger + G
Venezuela
Equador J
Nigeria G
Yemen, Republic of +
Egypt
Oman
Zambia + G
Equatorial Guinea +
Pakistan
Zimbabwe
Eritrea
Panama
Ethiopia +
Papua New Guinea
Fiji
Paraguay
Gabon PeruJ

---

CRS-37
Non-Independent Countries and Territories
Anguilla
Heard Island and McDonald
Turks and Caicos Islands
Islands
British Indian Ocean
Montserrat E
Virgin Islands, British E
Territory
Christmas Island (Australia) Niue
Wallis and Futuna
Cocos (Keeling) Islands
Norfolk
West Bank and Gaza Strip
Cook Islands
Pitcairn Islands
Western Sahara
Falkland Islands (Islas
Saint Helena
Malvinas)
Gibraltar
Tokelau
Associations of Countries (treated as one country)
Member Countries of the
Qualifying Member Countries of
Member Countries of the
Cartagena Agreement
the Association of South East
Caribbean Common Market
(Andean Group)
Asian Nations
(CARICOM)
Bolivia
Cambodia
Antigua and Barbuda
Colombia
Indonesia
Barbados
Ecuador
Philippines
Belize
Peru
Thailand
Dominica
Venezuela
Grenada
Guyana
Jamaica
Montserrat
St. Kitts and Nevis
Saint Lucia
Saint Vincent and the
Grenadines
Trinidad and Tobago
Member Countries of the
Qualifying Member Countries of
Qualifying Member Countries
West African Economic
the Southern Africa Development
of the South Asian
and Monetary Union
Community (SADC)
Association for Regional
Benin
Botswana
Cooperation (SAARC)
Burkina Faso
Mauritius
Bangladesh
Cote d’Ivoire
Tanzania
Bhutan
Guinea-Bissau
India
Mali
Pakistan
Niger
Sri Lanka
Senegal
Togo
Source: Harmonized Tariff Schedule of the United States.
+ GSP - Least-Developed Beneficiary Developing Country
J Beneficiary Country of Andean Trade Preference (ATPA)
E Beneficiary Country of Caribbean Basin Economic Trade Partnership Act (CBTPA)
G Beneficiary Country of African Growth and Opportunity Act (AGOA)

---

CRS-38
Table 7. Top Five Imports of Leading GSP Beneficiary Countries
(Total value of imports under GSP is more than $100 million)
Tariff (if not
Value of Imports
Value of Imports
GSP Share of
HTS No.
imported under
Description
Under GSP
from World
World
GSP)
(thousands)
(thousands)
Imports
Angola
10.5 cents per
2709002090
Crude petroleum testing 25 degrees API or more
$3,903,759
$88,895,796
4.39%
barrel
No. 6-type fuel oil under 25 degrees API having
5.25 cents per
2710190530
Saybolt Universal Viscosity at 37.8 degrees
$82,180
$13,432,207
0.61%
barrel centigrade of more than 125 seconds
5.25 cents per
2709001000
Crude petroleum testing under 25 degrees API
$78,486
$48,435,155
0.16%
barrel
10.5 cents per Naphthas, except motor fuel or motor fuel blending
2710112500
$17,105
$6,615,774
0.26%
barrel stock
Fuel oils testing under 25 degrees API having
5.25 cents per Saybolt Universal Viscosity at 37.8 degrees
2710190550
$16,641
$1,973,031
0.84%
barrel centigrade of 45 seconds or more but not more than
125 seconds
Argentina
Bovine and equine upholstery leather, full grain
4107115000
2.8% unsplit, whole hides and skins further prep after
$49,820
$247,477
20.13%
tanning or crusting, except of Hdg 4114

---

CRS-39
Tariff (if not
Value of Imports
Value of Imports
GSP Share of
HTS No.
imported under
Description
Under GSP
from World
World
GSP)
(thousands)
(thousands)
Imports
Methanol (methyl alcohol) not used in production of
2905112000
5.5%
$48,188
$1,376,889
3.50%
synthetic fuel or for direct use as a fuel
Meat of bovine animals, nesoi, not containing
1602502040
1.4% cereals or vegetables, prepared or preserved, in
$41,525
$139,876
29.69%
airtight containers holding 1kg or over
Whole upholstery leather of bovines (not buffalo)
4107195000
2.8% nesoi and equines nesoi, without hair on, prepared
$38,213
$55,660
68.66%
after tanning or crusting, not 4114
Confections or sweetmeats ready for consumption,
1704903550
5.6%
$23,929
$814,099
2.94%
nesoi, put up for retail sale
Brazil
Brakes and servo-brakes, nesoi, of the motor
8708395050
2.5%
$173,647
$2,525,694
6.88%
vehicles 8701 to 8705
8503009545
3.0% Parts of generators (other than commutators)
$119,178
$471,763
25.26%
7403110000
1.0% Refined copper cathodes and sections of cathodes
$107,809
$3,238,489
3.33%
Refined copper wire with a maximum cross-
7408116000
3.0% sectional dimension of over 6mm but not over
$106,757
$1,369,513
7.80%
9.5mm
Plywood 1 outer ply long leaf/short leaf/southern
4412194031
8.0%
$93,505
$215,509
43.39%
yellow/slash/pitch/Va pine both outer plys of

---

CRS-40
Tariff (if not
Value of Imports
Value of Imports
GSP Share of
HTS No.
imported under
Description
Under GSP
from World
World
GSP)
(thousands)
(thousands)
Imports
softwood
Chad
5.25 cents per
2709001000
Crude petroleum testing under 25 degrees API
$108,712
$48,435,155
0.22%
barrel
No. 6-type fuel oil under 25 degrees API having
5.25 cents per
2710190530
Saybolt Universal Viscosity at 37.8 degrees
$42,600
$13,432,207
0.32%
barrel centigrade of more than 125 seconds
Colombia
Plates, sheets, film, foil and strip, cellular, of
3921121950
5.3% polymers of vinyl chlor, combd w text materials,
$28,762
$73,787
38.98%
nesoi
Between
0.943854 and Cane sugar, raw, in solid form, to be used for certain
1701112000
1.4606 cents/kg,
$13,174
$135,929
9.69%
polyhydric alcohols
as determined by
temperature
Between
0.943854 and Cane sugar, raw solid form no added
1701111000
1.4606 cents/kg, flavoring/coloring matter, nesoi, described in
$9,120
$540,448
1.69%
as determined by additional US Note 5 (Chap. 17) & Provisional
temperature

---

CRS-41
Tariff (if not
Value of Imports
Value of Imports
GSP Share of
HTS No.
imported under
Description
Under GSP
from World
World
GSP)
(thousands)
(thousands)
Imports
0.01 cents/kg of
1703105000
Cane molasses, subject to quota, nesoi
$8,851
$87,491
10.12%
total sugars
6905100000
13.5% Roofing tiles, ceramic
$7,660
$39,413
19.44%
Croatia
7113192900
5.5% Gold necklaces and chains, nesoi
$86,545
$947,605
9.13%
Gold or platinum jewelry, whether plated or not,
7113195000
5.5%
$26,874
$5,820,529
0.46%
nesoi
9032100090
1.7% Thermostats, nesoi
$7,098
$525,342
1.35%
Machinery for molding or otherwise forming inner
8477510090
3.1%
$6,946
$97,106
7.15%
tubes
Control instruments for air conditioning,
9032896025
1.7%
$6,425
$353,460
1.82%
refrigeration or heating systems, nesoi
Dominican Republic
3926909880
5.3% Other articles of plastic, nesoi
$30,318
$2,541,833
1.19%
Bovine and equine upholstery leather, nesoi, grain
4107125000
2.8% splits, whole hide and skin, further prep affter
$27,496
$70,976
38.74%
tanning or crusting, other than leather of Hdg 4144
8301406060
5.7% Other locks of base metal, nesoi
$23,789
$86,935
27.36%
8531800050
1.3% Other signaling devices, electric, nesoi
$12,741
$177,157
7.19%

---

CRS-42
Tariff (if not
Value of Imports
Value of Imports
GSP Share of
HTS No.
imported under
Description
Under GSP
from World
World
GSP)
(thousands)
(thousands)
Imports
8531909000
1.3% Electric sound/visual sign machinery parts, other
$11,145
$336,377
3.31%
Equatorial Guinea
10.5 cents per
2709002090
Crude petroleum testing 25 degrees API or more
$888,227
$85,358,609
1.04%
barrel
10.5 cents per
2709002010
Condensate derived wholly from natural gas
$454,750
$3,537,187
12.86%
barrel
Methanol (methyl alcohol) not used in production of
2905112000
5.5%
$144,445
$1,376,889
10.49%
synthetic fuel or for direct use as a fuel
Grains, rolled or flaked, of cereals except rice of
1104199000
0.45 cents per kg
$28
$1,286
2.16%
heading 1006, nesoi
Light oils and preparations of other hydrocarbon
10.5 cents per
2710114590
mixtures, nesoi containing not over 50 percent of
$6
$2,402,986
0.00%
barrel any single hydrocarbon compound
India
Gold or platinum jewelry, whether plated or not,
7113195000
5.5%
$1,594,213
$5,820,529
27.39%
nesoi
Parts for steeering systems other than asssemblies
8708997360
2.5% with a universal joint, of motor vehicles 8701 to
$62,062
$1,098,907
5.65%
8705
7113192900
5.5% Gold necklaces and chains, nesoi
$59,676
$947,605
6.30%

---

CRS-43
Tariff (if not
Value of Imports
Value of Imports
GSP Share of
HTS No.
imported under
Description
Under GSP
from World
World
GSP)
(thousands)
(thousands)
Imports
Parts, exc conn rods, for compression-ignition
8409999190
2.5% internal combustion piston engines for road tractors,
$55,323
$814,644
6.79%
motor buses, automobiles, or trucks
Silver jewelry, articles and pts incl pr mtl pltd silvr
7113115000
5.0%
$53,063
$869,768
6.10%
val ov $18 per dozen pieces or parts
Indonesia
8525408050
2.1% Camcorders, not 8mm
$83,627
$941,452
8.88%
Gold or platinum jewelry, whether plated or not,
7113195000
5.5%
$69,926
$5,820,529
1.20%
nesoi
7606123090
3.0% Aluminum plates, sheet or strip, 6.3mm thick or less
$55,771
$1,626,848
3.43%
3907600050
6.5% polyethylene terephthalate, nesoi
$53,995
$661,708
8.16%
8506100000
2.7% Primary batteries, manganese dioxide
$42,498
$173,700
24.47%
Kazakhstan
7202410000
1.9% Ferrochromium over 4 percent carbon
$111,337
$303,317
36.71%
7202500000
10.0% Ferrosilicon Chromium
$24,406
$31,632
77.16%
7403110000
1.0% Refined copper cathodes and sections of cathodes
$22,846
$3,238,489
0.71%
Tantalum unwrought, including bars and rods
8103200090
2.5%
$12,211
$24,680
49.4%
obtaind simply by sintering

---

CRS-44
Tariff (if not
Value of Imports
Value of Imports
GSP Share of
HTS No.
imported under
Description
Under GSP
from World
World
GSP)
(thousands)
(thousands)
Imports
Gold or platinum jewelry, whether plated or clad or
7113195000
5.5%
$6,118
$5,820,529
0.11%
not, nesoi
Peru
Paprika, fruit of the genus capsicum, dried or
0904202000
3 cents per kg
$25,586
$44,306
57.75%
crushed or ground
2.5% on the value
7801100000
Refined lead, unwrought
$23,646
$241,550
9.79%
of lead content
Depilatories and other perfumery, cosmetic or toilet
3307900000
5.4%
$17,054
$131,835
12.94%
preparations, nesoi
Between
0.943854 and Cane sugar, raw solid form no added
1701111000
1.4606 cents/kg, flavoring/coloring matter, nesoi, described in
$15,024
$540,448
2.78%
as determined by additional US Note 5 (Chap. 17) & Provisional
temperature
6802912500
3.7% Travertine, further worked
$6,027
$366,445
1.64%
Philippines
Insulated ignition wiring sets and wiring sets for
8544300000
5.0%
$148,275
$5,782,030
2.56%
vehicles, aircraft, and boats
8544519000
2.6% Conductor: Other > 80 & <= 1000V
$62,673
$1,471,688
4.26%
1701111000
Between 1.4606 Cane Sugar, in solid form, not containing flavor or
$56,386
$540,448
10.43%

---

CRS-45
Tariff (if not
Value of Imports
Value of Imports
GSP Share of
HTS No.
imported under
Description
Under GSP
from World
World
GSP)
(thousands)
(thousands)
Imports
and 0.943854 other coloring matter
cents per kg
DC motors of an output exceeding 74.6 W but not
8501314000
4.0%
$47,220
$654,983
7.21%
exceeding 735 W
9001500000
2.0% Spectacle lenses of other materials, unmounted
$24,798
$335,148
7.40%
Romania
7202300000
3.9% Ferrosilicon manganese
$51,497
$231,177
22.28%
Gold or platinum jewelry, whether plated or not,
7113195000
5.5%
$30,009
$5,820,529
0.52%
nesoi
7606123030
3.0% Aluminum plates, sheet or strip, thicker than 6.3mm
$24,262
$330,370
7.34%
Gate type taps, cocks, and valves of steel, hand
8481803055
5.6%
$23,469
$234,554
10.01%
operated
7606123090
3.0% Aluminum plates, sheet or strip, 6.3mm thick or less
$21,779
$1,626,848
1.34%
Russia
Refined copper wire with a maximum cross-
7408116000
3.0%
$207,292
$1,369,513
15.14%
sectional dimension over 6mm but not over 9.5mm
7606123090
3.0% Aluminum plates, sheet or strip, 6.3mm thick or less
$68,607
$1,626,848
4.22%
7606123030
3.0% Aluminum plates, sheet or strip, thicker than 6.3mm
$68,545
$330,370
20.75%

---

CRS-46
Tariff (if not
Value of Imports
Value of Imports
GSP Share of
HTS No.
imported under
Description
Under GSP
from World
World
GSP)
(thousands)
(thousands)
Imports
Inorganic or organic compounds of precious metals,
2843900000
3.7% whether or not chemically defined; amalgrams of
$49,622
$89,124
55.68%
precious metals, nesoi
Aluminum foil not backed rolled not further worked
7607116000
$30,405
$142,800
21.29%
over 0.01 mmbut not over 0.15 mm thick
Sri Lanka
4011998500
3.4% New pneumatic tires, of rubber, nesoi
$28,681
$217,895
13.16%
4015191050
3.0% Gloves, seamless except disposable
$10,656
$96,900
11.00%
3802100000
4.8% Activated carbon
$9,864
$78,624
12.55%
New pneumatic tires (nonradial), of rubber, for
4011938000
3.4% construction or industrial handling vehicles and
$8,191
$41,997
19.50%
machines, rim size not over 61 cm, nesoi
Sacks and bags (including cones) of polymers of
3923210090
3.0% ethlyene except reclosable with integral extruded
$7,896
$490,654
1.61%
closure, nesoi
South Africa
7202410000
3.9% Ferrochromium over 4 percent carbon
$114,815
$231,177
49.67%
7606123090
3.0% Aluminum plates, sheet or strip, 6.3mm thick or less
$101,771
$1,626,848
6.26%
7202300000
3.9% Ferrosilicon manganese
$60,864
$231,177
26.33%

---

CRS-47
Tariff (if not
Value of Imports
Value of Imports
GSP Share of
HTS No.
imported under
Description
Under GSP
from World
World
GSP)
(thousands)
(thousands)
Imports
2849905000
3.7% Carbides, whether or not chemically defined
$56,986
$63,066
90.36%
Silicon containing by weight between 99.99 and 99
2804691000
5.3%
$50,578
$186,635
27.10%
percent silicon
Thailand
Gold or platinum jewelry, whether plated or not,
7113195000
5.5%
$590,713
$5,820,529
10.15%
nesoi
Reception aparatus for TV, non-hi def, color, single
picture tube, direct view, display exceeding 35.56cm
8528122800
3.9%
$170,286
$476,838
35.71%
incorporating video record or reproduction
apparatus.
Silver jewelry, articles and pts incl pr mtl pltd silvr
7113115000
5.0%
$82,156
$869,768
9.45%
val ov $18 per dozen pieces or parts
New pneumatic tires, of rubber, radial, used on
4011201015
4.0%
$78,906
$1,349,223
5.85%
bus/truck, on highway, except light trucks
Wooden frames for paintings, photographs, mirrors,
4414000000
3.9%
$66,410
$405,370
16.38%
or similar objects
Turkey
Gold or platinum jewelry, whether plated, clad or
7113195000
5.5%
$279,853
$5,820,529
4.81%
not, nesoi
7113192900
5.5% Gold necklaces and chains, nesoi
$103,992
$947,605
10.97%

---

CRS-48
Tariff (if not
Value of Imports
Value of Imports
GSP Share of
HTS No.
imported under
Description
Under GSP
from World
World
GSP)
(thousands)
(thousands)
Imports
Refined copper wire, with a maximum cross-
7408190000
3.0%
$37,421
$85,502
43.77%
sectional dimension under 6mm
6802911500
4.9% Marble, other than slabs
$32,619
$258,283
12.63%
Olive oil and its fractions, virgin, weighing with the
1509104000
3.4 cents per kg immediate container 18KG or more, not chemically
$31,548
$150,740
20.93%
modified
Venezuela
Methanol (methyl alcohol) not used in production of
2905112000
5.5%
$221,247
$1,376,889
16.07%
synthetic fuel or for direct use as a fuel
2909191400
5.5% Methyl tertiary-butyl ether
$111,155
$861,616
12.90%
Parts, nesoi, of motor vehicles, nesoi, of heading
8708998080
2.5%
$81,417
$6,194,851
1.31%
8701 to 8705
8708704545
2.5% Road wheels, of aluminum, for vehicles, nesoi
$42,066
$1,457,852
2.89%
Ferrosilicon over 55 but not more than 80 percent
1.5%
$36,144
$174,575
20.70%
7202215000
silicon 3 percent or less calcium
Yemen
10.5 cents per
2709002090
Crude petroleum testing 25 degrees API or more
$193,972
$88,895,796
0.22%
barrel
2710190550
5.25 cents per Fuel oils testing under 25 degrees API having
$9,348
$1,973,031
0.47%

---

CRS-49
Tariff (if not
Value of Imports
Value of Imports
GSP Share of
HTS No.
imported under
Description
Under GSP
from World
World
GSP)
(thousands)
(thousands)
Imports
Saybolt Universal Viscosity at 37.8 degrees
barrel centigrade of 45 seconds or more but not more than
125 seconds
10.5 cents per Naphthas, except motor fuel or motor fuel blending
2710112500
$3,662
$6,615,774
0.06%
barrel stock
8481809050
2.0% Other taps, cocks, valves, etc., nesoi
$16
$607,535
0.00%
Silver jewelry, articles and pts incl pr mtl pltd silvr
7113115000
5.0%
$7
$869,768
0.00%
val ov $18 per dozen pieces or parts
Source: ITC Trade Data Web [http://dataweb.usitc.gov] and Harmonized Tariff Schedule of the United States.

---