Generalized System of Preferences:
Agricultural Imports
Renée Johnson
Specialist in Agricultural Policy
January 3, 2011
Congressional Research Service
7-5700
www.crs.gov
RS22541
CRS Report for Congress
P
repared for Members and Committees of Congress

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Generalized System of Preferences: Agricultural Imports

Summary
The Generalized System of Preferences (GSP) provides duty-free tariff treatment for certain
products from designated developing countries. Agricultural imports under the GSP totaled $2.2
billion in 2009, about 11% of all U.S. GSP imports. Leading agricultural imports include
processed foods and food processing inputs, sugar and sugar confectionery, cocoa, processed and
fresh fruits and vegetables, beverages and drinking waters, olive oil, processed meats, and
miscellaneous food preparations and inputs for further processing. The majority of these imports
are from Thailand, Brazil, Argentina, India, and the Philippines. Some in Congress have
continued to call for changes to the program that could limit GSP benefits to certain countries,
among other changes. Opinion within the U.S. agriculture industry is mixed, reflecting both
support for and opposition to the current program. Congress made changes to the program in
2006, tightening its requirements on imports under certain circumstances.
In the past few years, Congress has extended GSP through a series of short-term extensions.
However, the 111th Congress did not extend the GSP in 2010, and it was set to expire December
31, 2010 (P.L. 111-124). The expiration of the GSP will likely become a legislative issue in the
112th Congress. In addition, leaders of the House Ways and Means Committee and the Senate
Finance Committee have continued to express an interest in evaluating the effectiveness of U.S.
trade preference programs, including the GSP, and broader reform of these programs might be
possible.

Congressional Research Service

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Generalized System of Preferences: Agricultural Imports

Contents
Background ................................................................................................................................ 1
GSP Agricultural Imports ............................................................................................................ 1
Legislative and Administrative Changes to GSP .......................................................................... 4
Possible Implications of Changes to the GSP............................................................................... 5

Tables
Table 1. U.S. Agricultural Imports under GSP, 2009 .................................................................... 2
Table 2. U.S. Agricultural Imports under GSP, by Country, 2009 ................................................. 3

Contacts
Author Contact Information ........................................................................................................ 6

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Generalized System of Preferences: Agricultural Imports

Background
The U.S. Generalized System of Preferences (GSP) was established by the Trade Act of 1974 (19
U.S.C. 2465; Sec. 505) and now provides preferential duty-free entry to more than 4,800
agricultural and non-agricultural products from 131 designated beneficiary countries and
territories.1 Agricultural products under the GSP totaled $2.2 billion in 2009, accounting for about
11% of the total value of annual GSP imports. Duty-free access for agricultural imports under the
program is an important issue for many in the U.S. agriculture industry who either support or
oppose the program. However, some in Congress have called for changes to the program that
could limit or curtail benefits to certain countries, among other changes. In 2008 and again in
2009, GSP was reauthorized through a series of one-year extensions. The 111th Congress did not
extend the GSP in 2010, and it was set to expire December 31, 2010 (P.L. 111-124).2
GSP Agricultural Imports
In 2008, U.S. imports under the GSP program totaled $20.3 billion, accounting for less than 2%
of all commodity imports. Leading U.S. imports under the GSP are manufactured products and
parts, chemicals, plastics, minerals, and forestry products. Roughly one-fourth of all GSP imports
consist of jewelry, electrical, and transportation equipment, both finished products and parts.3
Agricultural products accounted for 11% of all imports under the GSP, totaling $2.2 billion in
2009. Compared to 2000, the value of agricultural imports under the program has nearly doubled.
In 2009, imports under the GSP accounted for about 3% of total U.S. agricultural imports.4 Table
1 shows the leading agricultural products (ranked by value) imported into the United States under
the GSP program. Leading imports include processed foods and food processing inputs, sugar and
sugar confectionery, cocoa, processed and fresh fruits and vegetables, drinking waters, olive oil,
processed meats, and miscellaneous food preparations and inputs for further processing.
Most GSP agricultural imports are supplied by beneficiary countries that have been identified for
possible graduation from the program. In 2009, the top six beneficiary countries ranked by import
value—Thailand, Brazil, Argentina, India, the Philippines, and Turkey—accounted for the
majority of agricultural imports under the GSP (see Table 2). Brazil and India accounted for
nearly one-fifth of agricultural imports under the program. These countries are among those
identified by critics of GSP as countries whose benefits under the program should be limited or
curtailed.

1 Office of the U.S. Trade Representative (USTR), Generalized System of Preferences, http://www.ustr.gov/
Trade_Development/Preference_Programs/GSP/Section_Index.html.
2 The African Growth and Opportunity Acceleration Act of 2004 (P.L. 108-274) extended GSP preferences for all
beneficiary developing sub-Saharan African countries under the African Growth and Opportunity Act through
September 30, 2015.
3 U.S. Chamber of Commerce, Estimated Impacts of the U.S. Generalized System of Preferences to U.S. Industry and
Consumers, October, 2006, http://www.uschamber.com/reports/estimated-impacts-us-generalized-system-preferences-
us-industry-and-consumers.
4 The value of U.S. agricultural imports totaled $78.8 billion in 2009 (compiled by CRS using trade data from U.S.
International Trade Commission. Imports for consumption, actual U.S. dollars. Agriculture commodities as defined by
the WTO Agreement on Agriculture (USDA, Profiles of Tariffs in Global Agricultural Markets, AER-796, Appendix,
January 2001).
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Generalized System of Preferences: Agricultural Imports

More than 20% of GSP agricultural imports consist of sugar and sugar-based products, and cocoa
and cocoa-containing products. Sugar and confectionery imports accounted for 18% of the value
of agricultural imports under the GSP program (Table 1). Major GSP suppliers of cane and beet
sugar imports were the Philippines, Paraguay, Peru, Panama, and South Africa. Major suppliers of
confectionery were Brazil, Argentina, Colombia, the Philippines, South Africa, Thailand, and
Turkey. Cocoa and cocoa-containing products accounted for 5% of GSP agricultural imports, and
were supplied mainly by Brazil, the Côte d’Ivoire, and other African nations. Indonesia, among
other countries, is a supplier of imports of sugar alcohols and other agriculture-based organic
chemicals, such as sorbitol.
Table 1. U.S. Agricultural Imports under GSP, 2009
HTS Chapter(s)
2009

GSP Share All
Subsection Import
Categories
($ millions)
% Share
Ag Imports
19, 21, 13
Processed foods & food processing inputs
385.1
18%
5%
17
Sugar and sugar confectionary
378.9
17%
13%
20, 14
Processed fruits & vegetables, inputs
329.8
15%
7%
22
Beverages, water, spirits, and vinegar
152.7
7%
1%
1509 Olive
oil
150.5
7%
17%
23, 3501-3505, 3301, 38 Other ag-based chemicals, residues, &
148.2 7% 3%
(part)
byproducts
16
Processed meat & fish products
120.9
6%
3%
8 (part), 7
Other fresh fruits and vegetables
116.3
5%
1%
18
Cocoa & cocoa-containing products
102.1
5%
3%
8 (part)
Fresh tropical fruits
48.3
2%
2%
10, 11
Grain-based products
42.3
2%
1%
12, 15 (part)
Oilseeds & processed oils/fats
41.3
2%
1%
24 Tobacco
products
39.5
2%
3%
4 Dairy
products
36.8
2%
2%
9
Coffee, tea, & spices
33.2
2%
1%
2905 (part)
Ag-based organic chemicals (e.g. sorbitol)
19.7
1%
25%
6
Plants and cut flowers
15.8
1%
3%
5, 4301, 41 (part)
Misc. animal products, incl. hides
5.3
0%
1%
8 (part)
Nuts
3.6
0%
0%
1, 2
Meat products, incl. live animals
0.3
0%
0%
50-53 (part)
Ag-based textile inputs (cotton, wool)
0.2
0%
0%

Total 2,170.8
100% 3%
Source: CRS calculations from data from U.S. International Trade Commission, http://dataweb.usitc.gov.
Imports for consumption, actual U.S. dollars. Select GSP countries ranked by value of imports. Agriculture
commodities as defined by the WTO Agreement on Agriculture. Includes U.S. Harmonized Tariff Schedule
chapters 1-24, excluding chapter 3 (fish and fish products, except processed), and parts of chapters 29, 33, 35,
48, 41, 43, and 50-53 (USDA, Profiles of Tariffs in Global Agricultural Markets, AER-796, Appendix, January 2001).
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Generalized System of Preferences: Agricultural Imports

Table 2. U.S. Agricultural Imports under GSP, by Country, 2009
% Change
Country
2009
%
2005-
of Origin
($ millions
Share
2009
Major import product categories
Thailand
425.4
19.6%
48% food preparations, preserved fruits and vegetables, waters,
grain products, sauces and condiments, confectionery,
Brazil
273.0
12.6%
30% fruit juices, gelatin derivatives, sugar confectionery, tropical
fruits, miscellaneous food preparations, cocoa products
Argentina
241.7
11.1%
24% casein, olive oil, prepared meats, gelatin derivatives, cheese
and curd, sugar confectionery, wine
India
211.9
9.8%
71% vegetable saps/extracts, gelatin derivatives, preserved
cucumbers, essential oils (peppermint), spices
Philippines
137.1
6.3%
18% cane/beet sugar, fresh/processed fruits and tropical fruits,
fish products, coconut oil and coconuts, grains, waters
Turkey
131.7
6.1%
16% sugar confectionary, olive oil, prepared/preserved fruits and
vegetables, fruit juices, condiments and spices
Tunisia
106.1
4.9%
406% olive oil and olive products, tropical fruits, sugar
confectionary, sauces and condiments, spices
Indonesia
78.9
3.6%
61% sugar alcohols and organic chemicals, seafood, tobacco
products, sugar confectionary, edible animal products
Colombia
72.6
3.3%
1% sugar and confectionary, miscel aneous food preparations,
molasses, tropical fruits/vegetables, cocoa products
Fiji
47.4
2.2%
-20% mineral waters, molasses, tropical fruits/vegetables, grain
products, miscellaneous food preparations, plants
South Africa
42.1
1.9%
34% sugar, wine, fish products, yeasts, live plants and seeds,
essential oils, food preparations, spices
Cote d`Ivoire
40.8
1.9%
85% preserved/frozen fruit products, sugar, floriculture/plants,
seeds, bulbs, tuber vegetables
Pakistan
34.9
1.6%
272% cane/beet sugar, rice, miscel aneous food preparations,
spices, fresh/processed fruits and tropical fruits
Ecuador
33.4
1.5%
52% tropical fruits/vegetables, prepared fish products,
miscellaneous food preparations, fruit juices, cocoa products
Venezuela
29.2 1.3%
161%







Subtotal 1,906 87.8%
42%

Other 265
12.2%
16%

Total 2,171
100.0%
-49%

Source: CRS calculations from data from U.S. International Trade Commission (USITC),
http://dataweb.usitc.gov. Imports for consumption, actual U.S. dollars. Includes U.S. Harmonized Tariff Schedule
(HTS) chapters 1-24, excluding chapter 3 (fish and fish products, except processed), and parts of HTS chapters
29, 33, 35, 48, 41, 43, and 50-53. Select GSP countries ranked in terms of value of imports in 2007 (10-digit HTS
level). Agriculture commodities as defined by the WTO Agreement on Agriculture (for information, see USDA,
Profiles of Tariffs in Global Agricultural Markets, AER-796, Appendix, January 2001).
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Generalized System of Preferences: Agricultural Imports

Another nearly 40% of agricultural imports under the GSP program include food processing
inputs, such as miscellaneous processed foods, processed oils and fats, fruit and vegetable
preparations, and ag-based chemicals and byproducts. Other product categories and suppliers are
as follows. Olive oil accounted for 7% of GSP agricultural imports in 2009, supplied by Tunisia,
Turkey, and Argentina. Mineral waters and other types of nonalcoholic beverages (another 6%)
were supplied by Fiji and Thailand, among others. Imports of fresh and prepared fruits and
vegetables (about 10%) include bananas and other tropical produce.
Legislative and Administrative Changes to GSP
In the past few years, Congress has extended GSP through a series of short-term extensions.
However, the 111th Congress did not extend the GSP in 2010, and it was set to expire December
31, 2010 (P.L. 111-124). The expiration of the GSP will likely become a legislative issue in the
112th Congress, especially since many in Congress continue to support the program.5 In addition,
the leaders of the House Ways and Means Committee and the Senate Finance Committee have
continued to express an interest in evaluating the effectiveness of U.S. trade preference programs,
including the GSP, and broader reform of these programs has been expected in recent years.
The House Ways and Means Subcommittee on Trade conducted a hearing evaluating the
effectiveness of U.S. trade preference programs, including the GSP, in November 2009;6 the
Senate Finance Committee conducted an oversight hearing in June 2008, focusing on ways to
reform U.S. trade preference programs.7 Prior to the one-year extension in December 2009, the
Obama Administration had indicated that the debate on preference reform may extend into next
year; however, some Members have expressed their reluctance to pass a GSP renewal without
also enacting meaningful reform legislation.8
Amendments to the GSP in 2006 followed extensive debate about the program during the 109th
Congress. Specifically, some in Congress questioned the inclusion of certain more advanced
developing countries (BDCs)9 as beneficiaries under the GSP and also commented that certain
BDCs had contributed to the ongoing impasse in multilateral trade talks in the WTO Doha
Development Agenda.10 In response to these concerns, Congress amended the program in 2006 by
tightening the rules on “competitive need limits” (CNL)11 waivers that allow imports from
beneficiary countries in excess of GSP statutory thresholds for some products (P.L. 109-432).

5 “Congress Passes Short-Term ATPDEA, TAA Extensions, But Not GSP,” Inside U.S. Trade, December 23, 2010;
and press release of Senator Max Baucus, “Baucus Commends Passage of Short-Term Extension of Job-Creating Trade
Bill, Seeks Longer Extension,” December 22, 2010.
6 House Ways and Means Subcommittee on Trade, “Hearing on the Operation, Impact, and Future of the U.S.
Preference Programs,” November 17, 2009.
7 Senate Finance Committee, “Oversight of Trade Functions: Customs and Other Trade Agencies,” June 24, 2008.
8 See, e.g., remarks of Senator Charles Grassley, Ranking Member of Senate Finance Committee, Washington
International Trade Association, June 18, 2009.
9 A current listing of BDCs under the GSP is available in the U.S. Harmonized Tariff Schedule (General Notes).
10 See, e.g., U.S. Senate, Committee on Finance, Opening Statement of Senator Charles Grassley, Hearing on the
Nomination of Susan C. Schwab to be U.S. Trade Representative, May 16, 2006.
11 The previous law stipulated a CNL requiring that countries export no more than 50% of total U.S. imports of each
product or no more than a specified dollar amount of the imports for a given year. The amended law further tightened
these requirements.
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Generalized System of Preferences: Agricultural Imports

Historically, there have been few CNL waivers to the GSP for agricultural products and it is
unlikely that these program changes will greatly affect U.S. agricultural imports under the
program. In 2006, Congress had also renewed the GSP for two years through 2008.
Also, in 2006, the Trade Policy Staff Committee (TPSC), an advisory committee chaired by the
U.S. Trade Representative, instituted a series of investigations to evaluate possible changes to the
GSP.12 In its 2006 review the TPSC announced that the more than 80 previously granted CNL
waivers would be individually evaluated, in addition to the standard practice of examining
petitions for new CNL waivers. The TPSC said that it would also examine the eligibility status of
several “middle income” economies.13 Among the countries identified for possible removal as
beneficiaries under the program were Argentina, Brazil, India, the Philippines, Thailand, and
Turkey. These countries account for over 60% of the value of U.S. agricultural products imported
duty-free under the program. Although none of the countries cited lost their overall GSP
eligibility as a result of these reviews, several previously granted CNL waivers from these
countries were revoked. For agricultural imports under the GSP, the Côte d’Ivoire lost CNL
waivers for fresh or dried, shelled kola nuts (HTS 0802.90.94), as part of the 2006 review.
Argentina lost CNL waivers for cooked, shelled, fresh or dried peanuts (HTS 1202.20.40), as part
of the 2007 review. These waivers had allowed for these products to be imported from the Côte
d’Ivoire and Argentina duty-free under GSP despite the statutory import thresholds. Other
countries lost CNL waivers for some non-agricultural products, but not for agricultural products.
The 2006 review included decisions on other country and product petitions involving agricultural
products, but these changes are unlikely to greatly affect U.S. agricultural imports under the GSP.
For more information and for a discussion of possible legislative options, see CRS Report
RL33663, Generalized System of Preferences: Background and Renewal Debate.
Possible Implications of Changes to the GSP
The 2006 statutory changes to the GSP tightening rules for CNL waivers are unlikely to greatly
affect U.S. agricultural imports under the program. Historically, there have been few CNL
waivers for agricultural products imported duty-free under the GSP. Current waivers include
sugar and preserved bananas (Philippines), sugar, carnations, figs, yams, and gelatin derivatives
(Colombia), certain nuts (Argentina), animal hides (Argentina, South Africa, and Thailand), and
caviar (Russia). Other types of program changes, however, could affect U.S. agricultural imports
under the GSP, including additional limits on CNL waivers from certain countries or graduation
of some beneficiary countries. Countries that account for the majority of U.S. agricultural imports
under the GSP are Thailand, Brazil, Argentina, India, the Philippines, and Turkey.
Comments submitted to USTR as part of its 2006 review from U.S. agricultural industry groups
are mixed.14 For example, the American Farm Bureau Federation (AFBF) expressed its general

12 72 Federal Register 35895, June 28, 2007 (2006 Review); and 73 Federal Register 38297, June 3, 2008 (2007
Review). Regulations for implementing the GSP are at 15 C.F.R. Part 2007.
13 Countries may “graduate” or be removed as a beneficiary developing country if the country is determined to be
sufficiently competitive or developed (19 U.S.C. 2462(e)). For example, in 2008, the Republic of Trinidad and Tobago
graduated from the GSP program when it was determined to have become a ‘‘high income’’ country. Also, countries
that formally enter into a bilateral trading relationship with another developed country may also become ineligible, as
happened in 2007 for Bulgaria and Romania when they joined the European Union.
14 Based on public comments to the 2006 TPSC recommendations, posted at USTR’s website.
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Generalized System of Preferences: Agricultural Imports

opposition to the GSP program, stating that products imported duty-free under the program
compete with U.S.-produced goods without granting a commensurate level of opportunity for
U.S. producers in foreign markets. AFBF further supported withdrawal of CNL waivers for the
Philippines, Argentina, and Colombia. The Grocery Manufacturers Association (GMA) expressed
support for the current GSP program and identified certain agricultural products of importance to
GMA under the program, including sugar confections, spices, and certain processed foods and
inputs from Brazil, India, and Argentina. GMA’s position was generally supported by comments
from the American Spice Trade Association, the National Confectioners Association, and the
Chocolate Manufacturers Association. GMA also was a signatory of a letter sent to House and
Senate leaders in late 2010 urging Congress to extend the GSP.15
What remains unclear is whether duty-free access for most agricultural imports under the GSP
greatly influences a country’s willingness to export these products to the United States. In most
cases, costs associated with import tariffs are borne by the importer. These costs may be passed
on to the BDCs in terms of lower import prices. However, import tariffs to the United States for
most of these products tend to be low. As calculated by CRS, ad valorem equivalent tariffs range
from 3%-4% for sugar, 2%-10% for cocoa-containing products, 5%-12% for confectionery, 1%-
2% for most processed meats, about 2% for olive oil, less than 1% for mineral water, and about
5% for agriculture-based organic chemicals.16 In general, any additional costs that might be
incurred by the BDCs as a result of the proposed changes could be more than offset by the
generally higher U.S. prices for most products compared to prices in other world markets.
Nevertheless, the imposition of even relatively low import tariffs could represent an increase in
input costs to some U.S. food processors and industrial users. These costs could be passed on to
consumers through higher prices for these and other finished agricultural or manufactured
products. As shown in Table 1, about one-half of GSP agricultural imports are intermediate goods
and inputs, such as raw sugar, miscellaneous processed foods, preparations, and byproducts, and
agriculture-based organic chemicals.

Author Contact Information

Renée Johnson

Specialist in Agricultural Policy
rjohnson@crs.loc.gov, 7-9588



15 Letter to Representatives Sander Levin and Dave Camp, and Senators Max Baucus and Charles Grassley, from
several U.S. companies and manufacturing associations, including GMA, November 10, 2010,
https://www.apparelandfootwear.org/UserFiles/File/Letters/2010/111010gspcoalition.pdf.
16 Calculated tariffs based on the in-quota rate. Under the GSP, agricultural products subject to a TRQ exceeding the in-
quota quantity is ineligible for duty-free import (19 U.S.C. 2463(b)(3)).
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