Generalized System of Preferences (GSP): Overview and Issues for Congress




Generalized System of Preferences (GSP):
Overview and Issues for Congress

Updated January 7, 2021
Congressional Research Service
https://crsreports.congress.gov
RL33663




Generalized System of Preferences (GSP): Overview and Issues for Congress

Summary
The U.S. Generalized System of Preferences (GSP) program provides nonreciprocal, duty-free
tariff treatment to certain products imported to the United States from designated beneficiary
developing countries (BDCs). Congress first authorized the U.S. program in Title V of the Trade
Act of 1974. The European Union and other developed countries have implemented similar
programs since the 1970s. Most recently, Congress extended the U.S. GSP program in Division
M, Title V of the Consolidated Appropriations Act, 2018 (P.L. 115-141). This act extended the
GSP program until December 31, 2020, as well as retroactively renewing it for the time period
between December 31, 2017 (the previous expiration date) and April 22, 2018. The program
expired on December 31, 2020, before Congress passed legislation to reauthorize it.
Currently, 119 developing countries and territories are GSP beneficiary developing countries
(BDCs). The program provides duty-free entry into the United States for over 3,500 products
(based on 8-digit U.S. Harmonized Tariff Schedule tariff lines) from BDCs, and duty-free status
to an additional 1,500 products from 44 GSP beneficiaries additionally designated as least-
developed beneficiary developing countries (LDBDCs). In 2019, products valued at about $21.0
billion (imports for consumption) entered the United States duty-free under the program, out of
$235.1 billion worth of total imports from GSP-eligible countries. Total U.S. imports from all
countries amounted to about $2.5 trillion in 2019.
In recent years, Members of Congress have held a range of views on whether or not to continue to
include emerging market developing countries (e.g., India, Brazil, Turkey) as beneficiaries, or to
limit the program to least-developed countries. Duty-free access for products deemed “import
sensitive” has caused some controversy, as well as concerns about certain beneficiaries’
compliance with GSP eligibility requirements based on alleged violations of worker rights, failure
to protect intellectual property, and other practices. In May 2019, the President terminated
Turkey’s GSP designation based on its improved level of economic development. The President
also terminated India’s GSP eligibility in June 2019 on the basis of market access issues.
Thailand’s GSP benefits were partially suspended in 2019 and 2020 for worker rights and market
access issues, respectively.
GSP is one of several trade preference programs through which the United States seeks to help
developing countries expand their economies. Other U.S. trade preference programs, which are
built on GSP, are regionally focused, including the African Growth and Opportunity Act (AGOA)
and the Caribbean Basin Initiative (CBI, includes preference programs for Haiti). In addition to
the Haiti-specific program, there is also a specific program for Nepal. U.S. implementation of
GSP requires that developing countries meet certain eligibility criteria, such as providing the U.S.
with adequate market access, taking steps to maintain internationally recognized worker rights
and protect intellectual property rights, among other things. GSP rules of origin require that at
least 35% of the appraised value of the product be the “growth, product, or manufacture” of the
BDC. Certain “import-sensitive” products (e.g., most textiles and apparel) are specifically
excluded, and limits are placed on the quantity or value of any one product imported from any
one country under the program (except for products from LDBDCs and AGOA countries). GSP
country and product eligibility are also subject to annual review.
This report examines, first, recent legislative developments, along with a brief history, economic
rationale, and legal background leading to the establishment of GSP. Second, the report describes
U.S. GSP implementation. Third, the report briefly analyzes the U.S. program’s effectiveness and
stakeholders’ views, and discusses possible options for Congress.
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Contents
Introduction ..................................................................................................................................... 1
Latest Developments ....................................................................................................................... 1
History, Rationale, and Comparison of GSP Programs ................................................................... 2
Economic and Political Basis .................................................................................................... 3
GATT/World Trade Organization Framework .......................................................................... 4
Enabling Clause .................................................................................................................. 4
Additional Commitment to Least Developed Countries ..................................................... 5
Comparison of International GSP Programs ............................................................................. 5
EU Generalised Scheme of Preferences.............................................................................. 6
Canada’s General Preferential Tariff (GPT) ....................................................................... 8
Japan’s Generalized System of Preferences ........................................................................ 8

United States GSP Implementation ................................................................................................. 9
Country Eligibility Criteria ..................................................................................................... 10
Least-Developed Beneficiaries ......................................................................................... 12
Countries Most Recently Granted GSP Eligibility ........................................................... 13
Country Graduation from GSP ......................................................................................... 13

Reporting Requirements .......................................................................................................... 14
Eligible Products ..................................................................................................................... 15
GSP Rules of Origin ......................................................................................................... 16
GSP Product Coverage ...................................................................................................... 16

Annual Reviews ...................................................................................................................... 18
Petitions to Add to or Remove Products from GSP .......................................................... 19
Competitive Need Limits (CNL) ...................................................................................... 19
CNL Waivers ..................................................................................................................... 20
De Minimis Waivers .......................................................................................................... 20
Waivers for Articles Not Produced in the United States (NPUS) ..................................... 21
Reviews of Country Practices ........................................................................................... 21

Effects of the U.S. GSP Program ................................................................................................... 23
Effects on Developing Countries ............................................................................................ 23
Economic Effects on the U.S. Market ..................................................................................... 25
Stakeholders’ Concerns ................................................................................................................. 26
“Special and Differential Treatment” ...................................................................................... 26
Erosion of Preferential Margins .............................................................................................. 27
Underutilization of GSP .......................................................................................................... 28
Trade as Foreign Assistance .................................................................................................... 29
Conditionality of Preferences .................................................................................................. 30
Lower Costs of Imports ........................................................................................................... 30

Options for Congress ..................................................................................................................... 31
Negotiate Trade Agreements with GSP Countries .................................................................. 31
Authorize GSP Only for Least-Developed Countries ............................................................. 32
Reform GSP ............................................................................................................................ 32

Expand Application of GSP .............................................................................................. 33
Restrict Application of Preferences .................................................................................. 33


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Figures
Figure 1. Top 10 U.S. GSP Beneficiary Countries, 2019 .............................................................. 12
Figure 2. Imports of Travel Goods, Handbags, and Wallets .......................................................... 16
Figure 3. Top 10 U.S. GSP Imports, 2019 ..................................................................................... 17
Figure 4. U.S. Imports from GSP Beneficiary Countries .............................................................. 24
Figure 5. Utilization Rates of Top 10 U.S. GSP Beneficiary Countries in 2019 ........................... 29

Tables
Table 1. Leading U.S. GSP Imports, 2019 .................................................................................... 17

Table A-1. GSP Implementation and Renewal, 1974-2015 ........................................................... 34
Table B-1. Beneficiary Developing Countries and Regions for Purposes of the
Generalized System of Preferences ............................................................................................ 36

Appendixes
Appendix A. GSP Implementation and Renewal .......................................................................... 34
Appendix B. GSP Beneficiary Countries ...................................................................................... 36

Contacts
Author Information ........................................................................................................................ 37

Congressional Research Service

Generalized System of Preferences (GSP): Overview and Issues for Congress

Introduction
The Generalized System of Preferences (GSP) provides nonreciprocal, duty-free tariff treatment
to certain products imported into the United States from designated beneficiary developing
countries (BDCs). The United States, the European Union (EU), and other developed countries
have implemented similar programs since the 1970s in order to promote economic growth in
developing nations.
Currently, 119 developing countries and territories are GSP beneficiary developing countries
(BDCs). The GSP program provides duty-free entry into the United States for over 3,500 products
(based on 8-digit U.S. Harmonized Tariff Schedule tariff lines) from BDCs, and duty-free status
to an additional 1,500 products from 44 GSP beneficiaries additionally designated as “least-
developed beneficiary developing countries” (LDBDCs). In 2019, products valued at about
$21.0 billion (imports for consumption) entered the United States duty-free under the program,
out of $235.1 billion worth of total imports from GSP countries. Total U.S. imports from all
countries (including GSP) amounted to about $2.5 trillion in 2019.
This report briefly summarizes recent GSP developments. It provides a brief history, economic
rationale, legal background, and comparison of preferential trade programs worldwide and
describes the U.S. implementation of the GSP program.
Latest Developments
The Trump Administration took several notable actions under GSP. In May 2019, Turkey’s GSP
designation was terminated based on having reached a sufficient level of economic development.1
In June 2019, the President terminated India’s GSP designation for market access issues.2
On October 30, 2020, the President suspended Thailand’s GSP benefits for certain eligible
products, effective on December 30, 2020.3 The decision to suspend benefits for roughly $817
million worth, roughly one-sixth, of Thailand’s GSP imports under the program was based on the
President’s determination that it did not provide the United States with reasonable market access
for pork. Thailand’s GSP eligibility was partially suspended less than one year earlier, effective
April 25, 2020, after the President determined Thailand was not taking steps to provide its
workers with internationally recognized worker rights.4
On the same day, the U.S. Trade Representative (USTR) announced it self-initiated GSP
eligibility reviews for Eritrea and Zimbabwe on whether the beneficiary countries are taking steps
to meet the program’s worker rights eligibility criterion.5 It also announced the eligibility reviews
for Georgia (worker rights), Uzbekistan (worker rights), and Indonesia (market access) were

1 Proclamation 9887 of May 16, 2019, “To Modify the List of Beneficiary Developing Countries Under the Trade Act
of 1974,” 84 Federal Register 23425, May 21, 2019.
2 Proclamation 9902 of May 31, 2019, “To Modify the List of Beneficiary Developing Countries Under the Trade Act
of 1974,” 84 Federal Register 26323, June 5, 2019.
3 Proclamation 10107 of October 30, 2020, “To Modify Duty-Free Treatment Under the Generalized System of
Preferences and for Other Purposes,” 85 Federal Register 70027, November 4, 2020.
4 Proclamation 9955 of October 25, 2019, “To Modify Duty-Free Treatment Under the Generalized System of
Preferences and for Other Purposes,” 84 Federal Register 58567, October 31, 2019.
5 Ibid.
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closed with no loss of benefits, and the country designation review for Laos was closed with no
change in status.
Recent debates surrounding the possible reauthorization of GSP include some Members support
for reforming the program’s eligibility criteria, such as strengthening the provisions on labor laws
and worker rights, and adding new eligibility requirements on gender equality, human rights, and
environmental law and regulations.6 In September 2020, legislation was introduced in the Senate
that would have extended GSP for 16 months until April 2022 with no changes (S. 4729). Senator
Grassley announced that he introduced the bill so that the GSP could be extended without a
program lapse, while allowing “time for debate on any changes that members are interested in
making.”7
Some in Congress assert that inserting additional eligibility criteria in GSP are needed to “signal
to the world what we, as a nation, hold important.”8 On December 8, 2020, a House bill was
introduced that would have extended the program until June 2021 with modifications to the
eligibility criteria (H.R. 8884). The modifications in the proposed legislation would have added
considerations of human rights violations, environmental laws and regulations, and good
governance to the program’s eligibility criteria.
The GSP program expired on December 31, 2020. On December 21, 2020, U.S. Customs and
Border Protection (CBP) issued guidance on the expiration of GSP, noting that even though U.S.
importers will have to pay duties on GSP-eligible imports, they should continue flagging the
products with the Special Product Indicator (SPI)9 for GSP on import documents so that CBP may
automate the duty refund process in the event that Congress renews the program with a
retroactive refund clause.10
History, Rationale, and Comparison of
GSP Programs
The basic principle behind GSP trade programs worldwide is to provide developing countries
with unilateral preferential market access to developed-country markets in order to spur economic
growth in poorer countries. The preferential access is in the form of lower tariff rates (or as in the
U.S. case, duty-free status) for certain products that are determined not to be “import sensitive” in
the receiving country market. The program concept was first adopted internationally in 1968 by

6 Isabelle Icso, "Grassley: Democrats Holding GSP Renewal 'Hostage' to Win Trade Changes," Inside U.S. Trade,
December 1, 2020. Isabelle Icso, "Wyden: GSP Changes Needed to 'Raise the Bar' for U.S. Trading Partners," Inside
U.S. Trade
, December 2, 2020.
7 Isabelle Icso, "Grassley: Proposed GSP Extension Allows Time to Debate Changes," Inside U.S. Trade, September
29, 2020.
8 Isabelle Icso, "Blumenauer Introduces Legislation to Extend, Modify GSP Program," Inside U.S. Trade, December 8,
2020.
9 In the Harmonized Tariff Schedule of the United States (HTSUS), GSP-eligible products the SPI code “A” in the
“Special” tariff column next to an HTSUS subheading identifies that the product is GSP-eligible for all BDCs. The
code “A+” indicates that the product is eligible only from least-developed BDCs. The code “A*” identifies that the
product is not eligible to be imported under the program from one or more BDCs. The SPI must be indicated on the
appropriate CBP forms when importers claim duty-free status.
10 CBP, “CSMS #45244051—Guidance: Generalized System of Preferences (GSP) Expires Effective, December 31,
2020,” December 21, 2020, https://content.govdelivery.com/bulletins/gd/USDHSCBP-2b25e93.
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the United Nations Conference on Trade and Development (UNCTAD) at the UNCTAD II
Conference.11
Economic and Political Basis
The GSP concept and programs were established based on the premise 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 (e.g., raw materials), and help diversify their economies
to promote stable growth.12
Some economists claim that GSP 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 Agreement on Tariffs and Trade (GATT).13 Industrialized, developed nations argued that
the most-favored-nation (MFN) principle14 should be the fundamental and universal principle
governing multilateral trade, while less-developed countries believed that equal treatment of
economically unequal trading partners did not constitute equity in trade benefits. These countries
called for “special and differential treatment” for developing countries. Economists assert that
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 among import-sensitive industries in their
domestic markets.15
Due to differences in developed countries’ economic structures and tariff programs—as well as
differences in the types of domestic industries and products each country wanted to shield from
greater foreign competition—it proved difficult to create one unified system of tariff concessions
on additional products. Therefore, the GSP concept 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.16 As a result, the preference-
granting countries implemented various individual schemes of temporary, generalized,
nonreciprocal
preferences under which tariffs were lowered or eliminated on some imports from
certain developing countries.
Although not specifically allowed or codified in the GATT, the programs of most GSP-granting
countries place certain conditions on the nonreciprocal preferences by (1) excluding certain
countries; (2) determining specific product coverage; (3) determining rules of origin governing
the preference; (4) determining the duration of the scheme; (5) reducing preferential margins

11 U.N. Conference on Trade and Development, http://unctad.org. In addition to the United States and the European
Union, other developed countries that have GSP programs include Australia, Bulgaria, Canada, Japan, New Zealand,
Norway, the Russian Federation, Switzerland, and Turkey.
12 OECD Secretary-General. The Generalized System of Preferences: Review of the First Decade. Organisation for
Economic Co-operation and Development, 1983, p. 9 (hereinafter OECD GSP Review).
13 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.
14 The most-favored-nation principle means that countries must treat imports from other trading partners on the same
basis as that given to other nations. Therefore, with certain exceptions (including GSP, regional trading arrangements,
and free trade agreements), and tariffs are applied uniformly across countries, 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.”
15 OECD GSP Review, p. 11.
16 Ibid., p. 10.
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accruing to developing countries by continuing to lower or remove tariffs as a result of
multilateral, bilateral, and regional negotiations; (6) preventing the concentration of benefits
among a few countries; (7) including safeguard mechanisms or “escape” clauses to protect
import-sensitive industries; and (8) placing caps on the volume of duty-free trade entering under
their programs.17
GATT/World Trade Organization Framework
By its very nature as a trade preference, the GSP concept posed a problem under the GATT,
because granting preferences to particular countries is inconsistent with the fundamental
nondiscrimination obligation placed on GATT Parties (GATT Article I:1) to grant MFN tariff
treatment to the products of all other GATT Parties. However, since preference programs were
viewed as a means of transitioning developing countries to greater trade liberalization and
economic development, GATT Parties accommodated them in a series of joint actions.
First, 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
nonreciprocity. Under this principle, developed countries may 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.18 Second, because of the underlying MFN issue,
GATT Parties in 1971 adopted a waiver of Article I for GSP programs to allow developed
contracting parties to accord more favorable tariff treatment to the products of developing
countries for 10 years.19 The GSP was described in the decision as a “system of generalized, non-
reciprocal and non-discriminatory preferences beneficial to the developing countries.”
Enabling Clause
At the end of the Tokyo Round of Multilateral Trade Negotiations in 1979, developing countries
secured adoption of the so-called Enabling Clause, a permanent deviation from MFN by joint
decision of the GATT Contracting Parties.20 The clause states that notwithstanding GATT Article
I, “contracting parties may accord differential and more favorable treatment to developing
countries, without according such treatment to other contracting parties,” and applies this
exception to the following:
(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

17 David Wall, “Problems with Preferences,” International Affairs, vol. 47, October 1971, p. 95.
18 Edmond McGovern, International Trade Regulation ¶ 9.212 (updated 1999). Part IV is generally viewed as
nonbinding, 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).
19 GATT, Generalized System of Preferences; Decision of 25 June 1971, L/3545 (June 28, 1971).
20 GATT, Differential and More Favourable Treatment, Reciprocity and Fuller Participation of Developing Countries;
Decision of 28 November 1979, L/4903 (December 3, 1979).
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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.
Additional Commitment to Least Developed Countries
When launching the Doha Development Agenda (DDA) negotiations in November 2001, World
Trade Organization (WTO, successor to the GATT established in 1995) members committed
themselves to provide “duty free/quota free” (DFQF) access to the products of least-developed
countries in keeping with the shared objective of the international community as expressed in the
Millennium Development Goals.21 During DDA negotiations at the sixth WTO Ministerial
Conference in Hong Kong in 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 DFQF access to at least 97% of products originating from least
developed countries (LDCs) by 2008, “in a manner that ensures stability, security and
predictability.”22 Many developed countries continued to implement these provisions despite the
failure of the DDA. As of the WTO Nairobi Ministerial in October 2015, most developed
countries granted either full or near full access to LDCs, and several developing countries had
also taken concrete steps to provide duty-free access to products from LDCs.23
Comparison of International GSP Programs
Other developed countries besides the United States that implement GSP programs include
Australia, Canada, the EU, Iceland, Japan, New Zealand, Norway, the Russian Federation,
Switzerland, and Turkey.24 One economist has referred to these programs as a nonhomogeneous
set of national schemes sharing certain common characteristics.25 Generally, each preference-
granting country extends to qualifying developing countries (as determined by each benefactor)
an exemption from duties (reduced tariffs or duty-free access) on most manufactured products
and certain “non-sensitive” agricultural products. Product coverage and the type of preferential
treatment offered varies widely.26
In the WTO, the developing country status of members is generally based on self-determination.
For GSP, however, 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 among countries. If political or economic changes
have taken place in a beneficiary country, it might be excluded from GSP programs in some

21 World Trade Organization, “The WTO and the Millennium Development Goals,” http://www.wto.org/english/
thewto_e/coher_e/mdg_e/mdg_e.htm.
22 World Trade Organization, Ministerial Declaration, Annex F. December 18, 2005, WT/MIN(05)/DEC.
23 According to the World Trade Organization Preferential Trade Arrangements database (http://ptadb.wto.org/
ptaList.aspx), LDC-specific duty-free tariff preference schemes have been implemented in Morocco, Chile, China,
Chinese Taipei, Korea, Kyrgyz Republic, Tajikistan, and Thailand. See also Sena Kimm Gnagnon and Shishir
Priyadarshi, Has the Multilateral Hong Kong Ministerial Decision on Duty Free Quota Free Market Access Provided a
Breakthrough in the Least Developed Countries’ Export Performance?
, World Trade Organization, Economic
Research and Statistics Division, WTO Working Paper ERSD-2016-06, July 2016.
24 U.N. Conference on Trade and Development, “About GSP,” at http://www.unctad.org.
25 Sanchez Arnau, Juan C. The Generalized System of Preferences and the World Trade Organization. London:
Cameron May, Ltd., 2002, p. 187.
26 Ibid.
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countries but not in others. For example, the EU recently suspended Cambodia’s GSP
membership due to concerns over human rights abuses, while it remains a GSP beneficiary in the
U.S. program.27
Some countries, including the United States, also reserve the right to 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, and in the U.S. case, “if it has, or is likely to have, a
significant adverse effect on United States commerce.”28
In terms of additional GSP product coverage for LDCs, the EU’s program, which offers duty-free
access for “Everything but Arms,”29 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. In 2007, for example, the EU implemented a
regulation that grants additional GSP benefits to countries that have demonstrated their
commitment to sustainable development and internationally recognized worker rights.30
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,
administered monthly (or daily, if indicated). For other products, import ceilings and maximum
country amounts are set by prior allotment.31 The United States quantitatively limits imports
under the GSP program by placing “competitive need limit” (CNL) thresholds on the quantity or
value of commodities entering duty-free, as discussed in more detail below.
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, such as the EU’s, also specifically provide
for graduation of certain GSP recipients with respect to specific product sectors. A description of
three other countries’ GSP programs follows.
EU Generalised Scheme of Preferences
The European Economic Community (EEC) began implementing GSP in January of 1971. In the
current EU scheme, developing countries are automatically granted GSP status by the EU if they
are classified as having an income level below “upper middle income” by the World Bank, and do

27 European Commission, "Cambodia Loses Duty-free Access to the EU Market over Human Rights Concerns," press
release, August 12, 2020, https://trade.ec.europa.eu/doclib/press/index.cfm?id=2177.
28 19 U.S.C. 2462(b)(2)(c).
29 European Communities, GSP Council Regulation (EC) No. 2501/2001. See also Council Regulation (EC) No.
732/2008 of 22 July 2008 applying a scheme of generalised tariff preferences for the period from 1 January 2009 to 31
December 2011 and amending Regulations (EC) No 552/97, (EC) No 1933/2006 and Commission Regulations (EC)
No 1100/2006 and (EC) No 964/2007. Published in Official Journal of the European Communities, (OJ) OJ L 211 of 6
August 2008. The “Everything but Arms” provision applies to all goods except arms and munitions and white sugar.
(from October 1, 2009, to September 2012, sugar importers “shall undertake to purchase such products at a minimum
price not lower than 90% of the reference price.”). See Council Regulation (EC) No 2501/2001.
30 Ibid.
31 World Trade Organization, Committee on Trade and Development. Notification by Japan, June 21, 2000,
WT/COMTD/N/2/Add.9.
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not benefit from another arrangement (e.g., a free trade agreement or economic partnership
agreement) already granting them preferential access to the EU market.32 GSP countries must also
respect the principles of fifteen core conventions on human rights and labor rights listed in the
GSP regulation.33
The EU Generalised Scheme of Preferences has three different preference arrangements:
 The “Standard” GSP framework grants duty reductions for about 66% of all EU
tariff lines, to low-income or middle-income countries that do not benefit from
any other preferential trade access to the EU market. As of January 1, 2019, there
were 15 Standard GSP beneficiaries.34
 The Sustainable Development and Good Governance (GSP+) grants duty-free
access to the same 66% of EU tariff lines as Standard GSP to beneficiaries that
are found to be especially vulnerable in terms of economic diversification and
import volumes. In return, these countries must ratify and effectively implement
27 core international conventions, human and labor rights, environmental
protection, and good governance.35 As of January 1, 2019, there were 8 GSP+
beneficiary countries.
 The Everything but Arms (EBA) arrangement grants full duty-free, quota-free
access for all products except arms and ammunition for all United Nations-
classified least-developed countries. As of January 1, 2019, there were 48 EBA
beneficiaries.36
Additional EU GSP Changes in 2014
On January 1, 2014, the EU implemented additional substantial changes to its Generalised
Scheme of Preferences (EU GSP) program that it stated were intended to (1) better focus on
countries in need; (2) further promote core principles of sustainable development and good
governance; and (3) enhance stability and predictability.37 As part of the changes, the EU
mandatorily graduated all countries identified by the World Bank as upper-middle income and
above, as well as excluding those countries that benefit from a preferential market access
arrangement with the EU. To add a measure of stability to the program, the EU extended GSP
benefits for 10 years, and provided transition periods of at least one year for those countries that
will lose EU GSP eligibility.
The European Commission (EC) published a midterm evaluation of the EU’s current GSP
Regulation in October 2018. It “showed that the EU’s current GSP is on track delivering its
objectives” of bringing “clear economic benefits to developing countries, making it relevant to

32 European Commission website, “Generalized Scheme of Preferences,” https://ec.europa.eu/trade/policy/countries-
and-regions/development/generalised-scheme-of-preferences/.
33 The GSP regulations and the list of conventions can be found at the EU law website, https://eur-lex.europa.eu/legal-
content/EN/TXT/?uri=CELEX:32012R0978#d1e32-60-1.
34 European Commission, Report from the Commission to the European Parliament and the Council: Report on the
Generalized Scheme of Preferences Covering the Period 2016-2017
, COM(2018) 36 final, Brussels, January 19, 2018.
35 Ibid.
36 European Commission website, https://trade.ec.europa.eu/doclib/docs/2019/may/tradoc_157889.pdf.
37 Regulation (EU) No. 978/2012 of the European Parliament and of the Council of 25 October 2012 Applying a
Scheme of Generalized Tariff Preferences and repealing Council Regulation (EC) No. 732/2008, OJ L 303/1, October
31, 2012. See also European Commission, “Revised EU Trade Scheme to Help Developing Countries Applies on 1
January 2014,” Press Release, December 19, 2013.
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the development needs of developing countries,” and “focusing preferences on countries most in
need and has contributed to their sustainable development.” Therefore, EC staff reportedly “saw
no need to amend the GSP Regulation” before its expiration date of December 31, 2023.38
Economic Partnership Agreements
Since 2000, as part of a long-term overhaul of the EU’s relationship of its trade arrangements
with developing countries, including its GSP beneficiaries, negotiations have been ongoing to
establish reciprocal, WTO-compliant “Economic Partnership Agreements” (EPAs) with
developing country trading partners in the African, Caribbean, and Pacific (ACP) regions. As of
August 2020, there were 7 EPAs in the implementation phase, involving 31 ACP countries.39
Canada’s General Preferential Tariff (GPT)
Canada’s General Preferential Tariff (GPT), first implemented in 1974, provides duty-free or
reduced tariff rates for designated developing country beneficiaries. The GPT program expires,
and is reviewed and amended on a 10-year cycle. Canada’s Economic Action Plan for 2012
announced a comprehensive review of the GPT in advance of its expiration on June 30, 2014, due
to “significant shifts in the income levels and trade competitiveness of certain developing
countries” since 1974, and to ensure that the GPT is “aligned with Canada’s development policy
objectives.”40 As a result of the review, Canada withdrew GPT benefits from 72 countries, but
continues to extend preferential treatment to 103 beneficiaries, 48 of which also benefit from
Canada’s Least Developed Country Tariff (LDCT).41 Canada announced that it would continue to
review the list of beneficiary countries biannually, and will automatically graduate countries that
are either classified for two consecutive years as high or upper-middle income countries; or have
a 1% or greater share of world exports for two consecutive years.42 Canada’s GPT is currently
authorized until December 31, 2024.
Japan’s Generalized System of Preferences
Japan’s GSP program, first implemented in 1971, provides preferential tariff treatment to 128
developing countries and five territories, and is currently authorized through March 31, 2021.43
Beneficiaries are designated on the basis of (1) being in a stage of development, (2) having its
own trade and tariff system, (3) the country’s desire to receive preferential tariff treatment, and

38 European Commission, Report from the Commission to the European Parliament and the Council on the Application
of Regulation (EU) No 978/2012 Applying a Scheme of Generalised Tariff Preferences and Repealing Council
Regulation (EC) No 732/2008
, COM (2018) 665 final, October 4, 2018.
39European Commission, Economic Partnership Agreements: Putting Partnership into Practice, 2020. The EU has
implemented agreements with countries in Eastern and Southern Africa, the Southern African Development
Community, the Caribbean, and the Pacific regions. The EU has also concluded EPA negotiations with 16 Western
African countries, 5 East African countries, and Zambia. These EPAs will be implemented when all parties have signed
the agreements.
40 Canada Gazette, “Proposed Amendments to Canada’s General Preferential Tariff,” Volume 146, No. 51, December
22, 2012.
41 Ibid.
42 Ibid.
43 Ministry of Foreign Affairs of Japan, “Generalized System of Preferences: Explanatory Notes for Japan’s Scheme,”
https://www.mofa.go.jp/policy/economy/gsp/explain.html.
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(4) a determination by Cabinet Order that the beneficiary is a country or territory to which such
preferences may be extended.44
Reduced or duty-free status is provided for 416 products in the agricultural and fisheries sectors
(Harmonized System [HS] chapters 1-24) and for 3,151 industrial/manufactured products (HS
chapters 25-97). Most industrial products are duty-free to GSP beneficiaries, but tariff reductions
are provided on some import-sensitive items.45 Forty-six countries recognized as LDCs by the
United Nations receive duty-free, quota-free market access for the above products, as well as for
additional items (about 98% of all products defined at the tariff-line level).46
A country or territory may be partially graduated from Japan’s GSP scheme if it is classified as a
high-income country in World Bank statistics in the previous year, or is classified as an upper-
middle income country and the value of the beneficiary’s exports exceeds 1% of the total value of
world exports in the previous year.47 Countries are permanently graduated from GSP if they are
classified by the World Bank as a high-income economy for three consecutive years.
Beneficiaries may also lose GSP benefits for certain products if, for the past three years,
regarding Japanese exports of that product: (1) the average value of Japan’s imports of the
product originating from the beneficiary for the past three years exceeds 1.5 billion yen and 50%
of the world’s exports of the product to Japan, or (2) in the case of any fish product, the country
or territory is judged (by a Regional Fisheries Management Organization) to be against the
conservation of certain fish species.48
United States GSP Implementation
Congress first authorized the U.S. Generalized System of Preferences scheme in Title V of the
Trade Act of 1974 (P.L. 93-618), as amended.49 Title V provides the President authority to grant
duty-free treatment under GSP for eligible products imported from any beneficiary developing
country (BDC) or any least-developed beneficiary developing country (LDBDC), provided the
President with economic criteria in deciding whether to take any such action, and specified
certain other criteria for designating eligible countries and products.50
GSP country eligibility changes or changes in product coverage are made at the discretion of the
President, drawing on the advice of the International Trade Commission (ITC) and the United
States Trade Representative (USTR). The Trade Policy Staff Committee (TPSC), an executive
branch interagency body chaired by the office of the USTR, serves as the interagency policy

44 Ibid.
45 Ibid.
46 Ibid. See also World Trade Organization, Trade Policy Review, Report by Japan, WT/TPR/G/351, January 18, 2017.
47 World exports as captured in World Trade Organization statistics. Japan Customs website, “Graduation/Exclusion
from the GSP Scheme,” http://www.customs.go.jp/english/c-answer_e/imtsukan/1506_e.htm.
48 Ibid.
49 Trade Act of 1974, P.L. 93-618, Title V, as amended, 19 U.S.C. §2461-2467. See Table A-1, “GSP Implementation
and Renewal.”
50 19 U.S.C. §2461.
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coordination mechanism for matters involving GSP.51 The GSP Subcommittee52 of the TPSC
conducts an annual review in which petitions related to GSP country and product eligibility are
assessed, and makes recommendations to the full TPSC, which, in turn, passes these
recommendations to the USTR.
Country Eligibility Criteria
When designating BDCs and LDBDCs, 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:53
 other industrialized countries (Australia, Canada, EU member states, Iceland,
Japan, Monaco, New Zealand, Norway, and Switzerland are specifically
excluded);
 communist countries, unless they are a WTO member, a member of the
International Monetary Fund, and receive Normal Trade Relations (NTR)
treatment from the United States; must also not be “dominated or controlled by
international communism”;
 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 a significant adverse impact on U.S.
commerce;
 countries that have nationalized or expropriated the property of U.S. citizens
(including corporations, partnerships, or associations that are 50% or more
beneficially owned by U.S. citizens), or otherwise infringe on U.S. citizens’
intellectual property rights (IPR), including patents, trademarks, or copyrights;
 countries that have taken steps to repudiate or nullify existing contracts or
agreements of U.S. citizens (or corporations, partnerships, or associations that are
50% or more owned by U.S. citizens) in a way that would nationalize or seize
ownership or control of the property, including patents, trademarks, or
copyrights;
 countries that have imposed or enforced taxes or other restrictive conditions or
measures on the property of U.S. citizens; unless the President determines that
compensation is being made, good faith negotiations are in progress, or a dispute
has been handed over to arbitration in the Convention for the Settlement of
Investment Disputes or another forum;

51 According to 15 C.F.R. §2002.2, “The [Trade Policy Staff] Committee consists of a chairman designated by the
Special Representative from his Office, and of senior trade policy staff officials designated from their respective
agencies or offices by the Secretaries of Agriculture, Commerce, Defense, Interior, Labor, State, and Treasury, by the
Executive Director of the Council on International Economic Policy, and by the Chairman of the International Trade
Commission.” GSP regulations are found at 15 C.F.R. §2007.
52 The GSP Subcommittee includes officials from the agencies listed in footnote 36, except for Interior and Defense,
and also includes the U.S. Agency for International Development.
53 19 U.S.C. §2462.
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 countries that have failed to act in good faith to recognize as binding or enforce
arbitral awards in favor of U.S. citizens (or corporations, partnerships, or
associations that are 50% or more owned by U.S. citizens); and
 countries that grant sanctuary from prosecution to any individual or group that
has committed an act of international terrorism, or have not taken steps to support
U.S. efforts against terrorism.
Mandatory criteria also require that beneficiary countries
 have taken or are 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, and occupational safety and health); and
 implement their commitments to eliminate the worst forms of child labor.54
The President has the authority to waive certain mandatory criteria if he determines that GSP
designation of any country is in the national economic interest of the United States and reports
this determination to Congress.55
The President is also directed to consider certain discretionary criteria, or “factors affecting
country designation”:
 a country’s expressed desire to be designated a beneficiary developing country
for purposes of the U.S. program;
 the level of economic development of a country;
 whether or not other developed countries are extending similar preferential tariff
treatment to a country;
 a country is committed to providing reasonable and equitable access to its market
and basic commodity resources, and the extent to which a country has assured the
United States that it will not engage in unreasonable export practices;
 the extent to which a country provides adequate protection of intellectual
property rights;
 the extent to which a country has taken action to reduce trade-distorting
investment policies and practices, and to reduce or eliminate barriers to trade in
services; and
 whether or not a country has taken steps to grant internationally recognized
worker rights.56
The law further 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 (see Table B-1 for a list of currently eligible GSP beneficiaries). Figure 1
shows GSP duty-free imports of the top 10 BDCs as a proportion of their total imports to the
United States in 2018.57


54 19 U.S.C. §2462(b). The most recent GSP amendments required the support of U.S. efforts against terrorism and
expanded the definition of internationally recognized worker rights (Section 4102 of P.L. 107-210).
55 19 U.S.C. §2462(b)(2).
56 19 U.S.C. §2462(c). op. cit., p. 20.
57 19 U.S.C. §2462(d).
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Figure 1. Top 10 U.S. GSP Beneficiary Countries, 2019
GSP imports compared to BDC’s Normal Trade Relations (NTR) imports, $ billions

Source: CRS analysis of data from U.S. International Trade Commission (ITC) Dataweb.
Notes: *Turkey (as of May 2019) and India (as of June 2019) are no longer GSP beneficiaries and data above
reflect their partial year of eligibility. India was the largest beneficiary by import value in 2018.
Least-Developed Beneficiaries
The President is authorized by statute to designate any BDC as an LDBDC, based on an
assessment of the conditions and factors previously mentioned.58 Although the United Nations’
designation of LDCs plays a large factor in GSP least-developed beneficiary determinations,59
U.S. officials may also assess compliance with GSP statutory requirements and comments from
the public (as requested in the Federal Register) before identifying a country as “least-developed”
for purposes of GSP.60

58 19 U.S.C. §2462(a)(2).
59 19 U.S.C. §2462(c)(2).
60 For example, see USTR, “Generalized System of Preferences (GSP): Initiation of a Review to Consider the
Designation of East Timor as a Least Developed Beneficiary Country under the GSP,” 71 Federal Register 43543,
August 1, 2006. In practice, Administration designations are generally based on the United Nations designations of
LDCs.
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Countries Most Recently Granted GSP Eligibility
On December 22, 2017, President Trump reinstated Argentina’s GSP eligibility.61 On November
21, 2016, the USTR announced a review of Argentina for a possible designation as a BDC. The
country’s GSP benefits were suspended in May 2012 after the President determined that the
country failed to enforce arbitral awards in favor of U.S. entities based on two dispute cases from
2005 and 2006.62 Although the cases had been resolved when Argentina paid the awards in 2013,
it was still required to meet all the GSP statutory criteria in order to be re-designated as a BDC.
On September 14, 2016, President Obama announced that Burma was eligible for GSP and also
designated it a least-developed beneficiary. The action ended a 27-year suspension of Burma’s
GSP benefits due to worker rights violations.63 The reinstatement followed an extensive review of
Burma’s compliance with GSP eligibility criteria that had been ongoing since Burma’s
government first requested GSP reinstatement in 2013.64 Burma’s eligibility status became
official on November 14, 2016, following a 60-day congressional notification period.65 The
review of Burma’s GSP eligibility was just one part of a comprehensive review of the bilateral
relationship in the wake of Burma’s return to democratic governance.
Country Graduation from GSP
The President may terminate, suspend, or limit GSP status of a BDC if he determines that a
country is determined to be sufficiently competitive or developed. In May 2019, President Trump
terminated Turkey’s GSP eligibility for this reason.66
Mandatory GSP country graduation occurs when the BDC is determined to be a “high income
country” as defined by official World Bank statistics (gross national income [GNI] per capita of
$12,535 or more as of July 1, 2020).67 The last time that countries were mandatorily graduated
from GSP was on September 30, 2015, when President Obama determined that Seychelles,
Uruguay, and Venezuela had become “high income” countries, and therefore, no longer eligible
for GSP benefits, effective January 1, 2017.68

61 Proclamation 9687 of December 22, 2017, “To Take Certain Actions Under the African Growth and Opportunity Act
and for Other Purposes,” 82 Federal Register 61413, December 22, 2017.
62 Proclamation 8788, of March 26, 2012, “To Modify Duty-Free Treatment Under the Generalized System of
Preferences and for Other Purposes,” 77 Federal Register 18899, March 29, 2012. In the two cases, the World Bank’s
International Center for Settlement of Investment Disputes (ICSID) awarded two U.S. companies compensation on the
basis that Argentina had taken actions damaging to the companies’ investments. The cases are: International Centre for
Settlement of Investment Disputes, Azurix Corp v. Argentine Republic (ICSID Case No. ARB/03/30), and CMS Gas
Transmission Company v. Argentine Republic
(ICSID Case No. ARB/01/8). See ICSID database at
https://icsid.worldbank.org.
63 Proclamation 5955 of April 13, 1989, “Amending the Generalized System of Preferences,” 54 Federal Register
15357, April 18, 1989.
64 United States Trade Representative, “United States Reinstates Trade Preference Benefits for Burma Following
Review of Eligibility Criteria,” press release, September 2016. See also CRS In Focus IF10352, U.S. Relations with
Burma: Key Issues for 2016
, by Michael F. Martin.
65 Proclamation 9492 of September 14, 2016, “To Modify Duty-Free Treatment Under the Generalized System of
Preferences,” 81 Federal Register 63671, September 18, 2016.
66 Proclamation 9887 of May 16, 2019, “To Modify the List of Beneficiary Developing Countries Under the Trade Act
of 1974,” 84 Federal Register 23425, May 20, 2019.
67 19 U.S.C. §2462(e).
68 Proclamation 9333 of September 30, 2015, “To Modify Duty-Free Treatment Under the Generalized System of
Preferences and for Other Purposes, 80 Federal Register 60249, October 5, 2015.
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If a country becomes part of an association of countries specifically excluded from GSP, the
country is also mandatorily withdrawn from GSP. Bulgaria and Romania were the last countries
to lose GSP eligibility for this reason, effective when they became EU member states as of
January 1, 2007.69 Croatia, the latest country to join the EU (in 2013), was also previously a GSP
beneficiary, but was mandatorily graduated from GSP as a “high income” country in 2009, prior
to its accession to the EU.70
Although not specifically required by GSP statute, a developing country that enters into a free
trade agreement (FTA) with the United States, at the discretion of Congress, generally loses GSP
eligibility in favor of the reciprocal concessions granted by the FTA. Specific language to this
effect appears in FTA implementing legislation.71
The President may also suspend, terminate, withdraw, or limit a country’s GSP status if he
determines that a country is not complying with one or more of GSP statute’s eligibility
requirements.72 On May 31, 2019, the President terminated India’s GSP designation because
“India has not assured the United States that India will provide equitable and reasonable access to
its markets.”73
Reporting Requirements
The President must advise Congress prior to the designation of any country as a GSP beneficiary,
and at least 60 days before he designates any country as a least-developed beneficiary country.74
The President must also notify Congress at least 60 days in advance of the termination of a
country’s GSP status.75 A country’s change in status becomes effective following the President’s
formal announcement by executive order or presidential proclamation.76 The President must also
advise Congress “as necessary” on the application of presidential authority, and the actions taken
to “withdraw, suspend, or limit” the application of duty-free treatment if beneficiaries are not
found to be in compliance with certain eligibility criteria.77
Additional GSP reporting requirements include an annual report to Congress on the status of
internationally recognized worker rights within each BDC, including findings of the Secretary of

69 Proclamation 8098 of December 29, 2006, “To Take Certain Actions Under the African Growth and Opportunity Act
and the Generalized System of Preferences,” 72 Federal Register 459, January 4, 2007. Croatia, the last country to join
the EU in July 2013, was also previously a GSP beneficiary, but graduated in 2011. European Union member states are
specifically identified as ineligible for designation as GSP countries in 19 U.S.C. §2462 (b)(1)(C).
70 Croatia was designated a BDC in Proclamation 6465 of August 25, 1992, “To Amend the Generalized System of
Preferences,” 57 Federal Register 30395, August 27, 1992, and was graduated from the GSP program in Proclamation
8467 of December 23, 2009, “To Modify Duty-Free Treatment Under the Generalized System of Preferences,” 74
Federal Register
69221, December 30, 2009.
71 Colombia and Panama were the latest countries to lose GSP status for this reason. See Section 201(a)(2) of the
United States-Colombia Trade Promotion Agreement (P.L. 112-42) and Section 201(a)(2) of the United States-Panama
Trade Promotion Implementation Act (P.L. 112-43). One country, Jordan, continues to be eligible for GSP benefits
even though it entered into an FTA with the United States in 2001.
72 19 U.S.C. §2462(d)(1).
73 Proclamation 9902 of May 31, 2019, “To Modify the List of Beneficiary Developing Countries Under the Trade Act
of 1974,” 84 Federal Register 26323, June 5, 2019.
74 19 U.S C. §2462(f)(1).
75 19 U.S.C. §2462(f)(2).
76 19 U.S.C. §2462(d)(2).
77 19 U.S.C. §2462(d)(3).
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Labor with respect to the beneficiary country’s implementation of its international commitments
to eliminate the worst forms of child labor.78
Eligible Products
The Trade Act of 1974 authorizes the President to designate certain imports as eligible for duty-
free treatment under GSP after receiving advice from the United States International Trade
Commission (ITC).79 “Import-sensitive” products specifically excluded from preferential
treatment include most textiles and apparel goods; watches; footwear and other accessories; most
electronics, steel, and glass products; and certain agricultural products that are subject to tariff-
rate quotas.80 Congress, from time to time, has amended the GSP law to provide the President
with additional authority to declare duty-free access for certain products previously considered
“import-sensitive,” provided that the ITC examines the possible effects on the U.S. market of
granting duty-free access to GSP beneficiaries. The last time that Congress amended the list of
import-sensitive products was in Section 204 of P.L. 114-27, the Trade Preferences Extension Act
of 2015, which gave the President the authority to designate certain luggage and travel products
as eligible for GSP.81 The value of travel goods imported under the GSP program substantially
increased beginning in 2017, contributing to the increase in total U.S. imports of such products.
U.S. imports of travel goods claiming GSP preference made up roughly 86% of total imports in
2019, compared to 10% in 2016 (Figure 2).

78 19 U.S.C. §2464. See U.S. Department of Labor, Bureau of International Labor Affairs, 2017 Findings on the Worst
Forms of Child Labor
, https://www.dol.gov/agencies/ilab/resources/reports/child-labor/findings.
79 19 U.S.C. §2463(a)(1).
80 19 U.S.C. §2463(b).
81 President Obama designated travel goods eligible for GSP when imported from least-developed countries only, see
Proclamation 9333 of September 30, 2015, “To Modify Duty-Free Treatment Under the Generalized System of
Preferences and For Other Purposes,” 80 Federal Register 60247, October 5, 2015. President Trump designated these
products eligible for all beneficiaries, see Proclamation 9625 of June 29, 2017, “To Modify Duty-Free Treatment
Under the Generalized System of Preferences and for Other Purposes, 82 Federal Register 30711, June 30, 2017.
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Figure 2. Imports of Travel Goods, Handbags, and Wallets
In current U.S. dollars

Source: CRS analysis of data from ITC Trade Dataweb.
Notes: *Section 204 of the Trade Preferences Extension Act of 2015 expanded the list of eligible products that
may be designated to certain luggage and travel products found under HTS heading 4202.
GSP Rules of Origin
Eligible goods under the U.S. GSP program must meet certain rules of origin (ROO)
requirements in order to qualify for duty-free treatment. First, duty-free entry is only allowed if
the article is imported directly from the beneficiary country into the United States without
entering the commerce of a third country. Second, at least 35% of the appraised value of the
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 BDC (or any two or more
BDCs 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.82
GSP Product Coverage
More than 3,500 products83 are currently eligible for duty-free treatment, and about 1,500
additional products originating in LDBDCs may receive similar preferential treatment. Table 1
provides leading products imported under GSP from all countries in 2018, including the
Harmonized Tariff Schedule (HTS) subheading and description, along with the tariff that would

82 19 U.S.C. § 2463(a).
83 GSP-eligible products are classified in the Harmonized Tariff Schedule of the United States (HTSUS) eight-digit
tariff level.
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have been assessed if the product had been imported under NTR tariff rates. Figure 3 shows the
Top 10 U.S. GSP imports in 2018 as a proportion of U.S. total NTR trade for those products.
Figure 3. Top 10 U.S. GSP Imports, 2019
in current U.S. dollars

Source: CRS analysis of data from ITC Trade Dataweb.
Notes: Products are categorized at the HTSUS 8-digit level.

Table 1. Leading U.S. GSP Imports, 2019
HTS
GSP Imports
Number
NTR Tariff Rate
HTS Description
(millions U.S. $)
7113.19.29
5.5%
Gold necklaces and neck chains (other than of
$425.9
rope of mixed links)
4202.92.31
17.6%
Travel, sports and similar bags with outer
$444.2
surface of man-made fibers
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HTS
GSP Imports
Number
NTR Tariff Rate
HTS Description
(millions U.S. $)
4202.22.15
16.0%
Handbags, whether or not with shoulder
$330.1
strap, including those without handle, with
outer surface of plastic sheeting
4015.19.10
3.0%
Seamless gloves of vulcanized rubber other
$321.0
than hard rubber, other than surgical or
medical gloves
4202.21.90
9.0%
Handbags, whether or not with shoulder
$308.5
strap, including those without handle, with
outer surface of leather or composition
leather, valued over $20 each
2009.89.70
0.5 cents per liter
Fruit juice (berry, mango, and other)
$286.0
7113.19.50
5.5%
Articles of jewelry and parts of precious metal
$266.0
(platinum and other metals not including gold
and silver)
9405.30.00
8.0%
Christmas tree lighting sets
$265.8
8415.90.80
1.0%
Parts for air conditioning machines, not
$259.4
otherwise specified or indicated
2106.90.98
6.4%
Beverage additives (sweeteners, coffee
$255.5
whiteners, cream/milk substitutes, flavored
honey, etc.)
4202.92.45
20.0%
Travel, sports and similar bags with outer
$240.0
surface of textile material (other than cotton,
man-made fibers, paper yarn, and silk)
4202.91.90
4.5%
Other luggage and travel goods with outer
$234.0
surface of leather or of composition leather
3907.61.00
6.5%
Poly(ethylene terephthalate) having a viscosity
$215.1
number of 78 ml/g or higher
7202.41.00
1.9%
Ferrochromium containing by weight more
$198.1
than 4% of carbon
40112010
4.0%
New pneumatic radial tires, of rubber, of a
$190.1
kind used on buses or trucks
Source: CRS analysis of data from ITC Trade Dataweb.
Notes: NTR tariff rate refers to the rate that applies if the article is not imported duty-free under GSP.
Annual Reviews
The TPSC’s GSP Subcommittee reviews and revises the lists of eligible products annually,
generally on the basis of petitions received from beneficiary countries or interested parties
requesting that additional products be reviewed (i.e., added or removed) for GSP eligibility.84

84 The GSP Subcommittee is a sub-group of the Trade Policy Staff Committee (TPSC). The TPSC, through the USTR,
is charged with advising the President on GSP beneficiary country designations and covered products (see Section 8 of
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When a country’s petition for product eligibility is approved, the product becomes GSP-eligible
for all BDCs (or only for LDBDCs if so designated).85 The 2020 annual product review was
announced in the Federal Register on May 7, 2020.86 In the context of an annual product review,
countries may petition for certain products to be added to GSP, or to receive waivers of certain
limits to GSP status, as described below. Interested parties are also given the opportunity for
public comment and hearings are held.
The GSP Subcommittee also annually reviews issues regarding BDCs’ and LDBDCs’ observance
of country practices (such as worker rights or IPR protection); 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 are “import sensitive” relative to U.S.
domestic firms.87
The GSP Subcommittee, after consultations with the ITC, makes recommendations to the
President regarding various product waivers that BDCs may have requested. Waiver petitions, if
granted, are country-specific. Any modifications to product lists usually take effect on July 1 of
the calendar year after the next annual review is launched, but may also be announced and
become effective at other times of the year. At the completion of an annual review, the results are
announced by proclamation.
Petitions to Add to or Remove Products from GSP
In the context of a GSP annual review, beneficiaries or other interested parties may request that
certain products be added to the list of eligible products for GSP. If a beneficiary requests that a
product be provided GSP status, and the request is approved, the product becomes GSP-eligible
for all GSP beneficiaries (or, in some instances, for least-developed beneficiaries only). On
October 30, 2020, President Trump signed a proclamation containing the results of the 2020
annual product review, adding fresh-cut roses (HTS 0603.11.00) to GSP eligibility.88
Interested parties may also request that products be removed from GSP status. In the 2020 annual
review, parboiled rice (HTS 1006.30.10) was removed from GSP eligibility.89
Competitive Need Limits (CNL)
The GSP statute establishes “competitive need limit” (CNL) requirements for the President to
suspend GSP treatment for individual products from BDCs (LDBDCs and AGOA countries are
exempt) if:
 imports of a product from a single country reach a specified threshold value,
which increases by $5 million each calendar year (i.e., $190 million in 2019 and
$195 million in 2020); or

Executive Order 11846, 40 Federal Register 14291, as amended).
85 USTR, U.S. Generalized System of Preferences: Guidebook, September 2016 (hereinafter, GSP Guidebook).
86 USTR, “Generalized System of Preferences (GSP): Notice Regarding the 2020 GSP Annual Product Review,” 85
Federal Register 27261, May 7, 2020.
87 19 U.S.C. §2463(d)(1)(A). See United States International Trade Commission, Generalized System of Preferences:
Possible Modifications, 2017 Review
, Publication Number 4827, Investigation Number 332-567, September 2018,
https://usitc.gov/sites/default/files/publications/332/pub4827.pdf.
88 Proclamation 10107 of October 30, 2020, “To Modify Duty-Free Treatment Under the Generalized System of
Preferences and for Other Purposes,” 85 Federal Register 70027, November 4, 2020.
89 Ibid.
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 50% or more of total U.S. imports of a product entering under GSP come from a
single country.90
Section 502 of P.L. 115-141 amended the date that products that exceed the CNL become GSP-
ineligible from GSP to November 1 of the next calendar year rather than July 1.
In the 2020 product review, due to CNLs Ecuador lost its GSP eligibility for Taro (HTS
0714.40.10), and Brazil for gum, wood or sulfate turpentine (HTS 3805.10.00) and diesel-
powered electric generating sets (HTS 8502.12.00).91
CNL Waivers
Also in the context of an annual review, BDCs may petition for CNL waivers, which the
President reviews on a case-by-case basis. In deciding whether to grant a waiver, the President
must (1) receive advice from the ITC as to whether a U.S. domestic industry could be adversely
affected by the waiver; (2) determine that the waiver is in the U.S. economic interest; and (3)
publish the determination in the Federal Register.92 The President is also required to give “great
weight” to the extent to which the BDC opens its markets to the United States and protects IPR.93
In 2006, Congress amended the GSP law to provide that the President should revoke any CNL
waiver that had been in effect for five years or more if (1) the exports of the product were in
excess of 1.5 times of the specified dollar amount reflected in the CNL provision; or (2) imports
of the product exceeded 75% of the appraised value of total imports of the product into the United
States in a calendar year.94
In the 2020 GSP annual review, four countries: Argentina, Brazil, Ecuador, and Indonesia
received CNL waivers, for products, including taro, chemicals, plywood, gold jewelry, and
engines.95
De Minimis Waivers
De minimis waivers may also be provided if the total dollar value of a particular product imported
into the United States from all countries is small; CNL would not apply for the identified product.
The de minimis level is adjusted each year, in increments of $500,000; for example, $24.5 million
in 2019, $25.0 million in 2020, and $25.5 million in 2021.96 In the 2020 GSP product review, de
minimis
waivers were granted to 24 products from eight countries, including fresh cut orchids
from Thailand, shelled macadamia nuts from Brazil, woven rattan from Indonesia, and more.97

90 LDBDCs and sub-Saharan African beneficiaries of AGOA are exempt from competitive need limits (19 U.S.C. §
2463(c)(2)(A)). See also GSP Guidebook, p. 11.
91 Proclamation 10107 of October 30, 2020, “To Modify Duty-Free Treatment Under the Generalized System of
Preferences and for Other Purposes,” 85 Federal Register 70027, November 4, 2020.
92 19 U.S.C. §2463(d).
93 19 U.S.C. §2463(d)(2).
94 Ibid.
95 Proclamation 10107 of October 30, 2020, “To Modify Duty-Free Treatment Under the Generalized System of
Preferences and for Other Purposes,” 85 Federal Register 70027, November 4, 2020.
96 19 U.S.C. §2463(c)(2)(F). These waivers are automatically reviewed by the GSP Subcommittee (see below), but are
granted at the discretion of the President.
97 Proclamation 10107 of October 30, 2020, “To Modify Duty-Free Treatment Under the Generalized System of
Preferences and for Other Purposes,” 85 Federal Register 70027, November 4, 2020. USTR, “Results of the 2020
Annual Generalized System of Preferences (GSP) Review,” 85 Federal Register 71391, November 9, 2020. For a full
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Waivers for Articles Not Produced in the United States (NPUS)
As part of the most recent GSP renewal, (Division M, Section 502 of P.L. 115-141, enacted in
March 2018) Congress amended the GSP statute to provide that BDCs could apply for waivers of
competitive need limits for certain products that were not produced in the United States for three
years prior to the waiver request
. Interested parties may petition for a waiver during the annual
review process.98 Prior to this amendment, certain products that the President determined were
not produced in the United States on January 1, 1995, were eligible for waivers of competitive
need limits.
Reviews of Country Practices
As part of GSP annual reviews, any interested party may file a request that the GSP eligibility of
any current GSP beneficiary be reviewed. For example, the GSP review of India announced in
April 2018 was based on market access petitions from three U.S. industry associations alleging
that India did not provide equitable and reasonable access to its market.99 India’s GSP eligibility
was subsequently removed by Proclamation 9902 of May 31, 2019.100 An ongoing eligibility
review of Kazakhstan is based on a petition from the American Federation of Labor and Congress
of Industrial Organizations (AFL-CIO) alleging that its government restricts the right to form
trade unions and other internationally recognized worker rights.101 On October 30, 2020,
Thailand’s GSP eligibility for certain products was suspended as a result of a petition filed by the
National Pork Producers Council in 2018, alleging that it is not meeting the GSP eligibility
criterion to provide equitable and reasonable market access.102 Thailand was also being
investigated for worker rights issues, and in context of the 2020 annual review, the President
suspended Thailand’s GSP eligibility for 231 products worth about $817 million in 2019,
effective December 30, 2020.103 The products included steering wheels, plastic glass frames,
certain chemical products, and rubber or plastic bedding.104 Thai officials expressed confidence
that Thai exports of these products were competitive in the U.S. market despite the tariffs ranging
from 3% to 4% on these items that would be assessed due to the GSP suspension. The officials
estimated that the losses would only amount to about $19 million.105
In October 2017, the USTR announced a new “proactive” process for ensuring that GSP
beneficiaries are complying with the program’s eligibility criteria. The process includes increased

list of products granted de minimis waivers, see
https://ustr.gov/sites/default/files/files/Press/Releases/GSP%20Annual%20Product%20Review%20-
%20Final%20Decisions.pdf.
98 19 U.S.C. §2463(c)(2)(E). See USTR Guidebook, p. 11.
99 USTR, “Initiation of Country Practice of India, Indonesia, and Kazakhstan,” 83 Federal Register 18618, April 27,
2018. See also USTR Transcript, Public Country Practice Hearing for the Generalized System of Preferences (GSP),
June 19, 2018, https://www.regulations.gov/document?D=USTR-2018-0012-0017.
100 Proclamation 9902 of May 31, 2019, “To Modify the List of Beneficiary Developing Countries Under the Trade Act
of 1974, 84 Federal Register 26323, June 5, 2019.
101 USTR, “Initiation of Country Practice of India, Indonesia, and Kazakhstan,” 83 Federal Register 18618, April 27,
2018. See also USTR Transcript, Public Country Practice Hearing for the Generalized System of Preferences (GSP),
June 19, 2018, https://www.regulations.gov/document?D=USTR-2018-0012-0017.
102 USTR, “USTR Announces GSP Enforcement Action, Country Successes, and New Eligibility Reviews,” Press
Release, October 30, 2020.
103 "Thailand: Slight Impacts of U.S. GSP Suspension," Asia News Monitor, November 4, 2020.
104 "GSP Suspension Gauged to Cost $19 Million in Losses," The Bangkok Post, November 3, 2020.
105 Ibid.
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efforts to conclude outstanding country practices reviews, and a triennial assessment of each
beneficiary’s compliance with the statutory GSP eligibility criteria. The first assessment period
(in 2018) focused on Asian BDCs. If the TPSC review raises concerns about a BDC’s
compliance, it may self-initiate a country practice review of the country’s continued GSP
eligibility.106 The new country practice reviews of India, Indonesia, and Turkey initiated in 2018,
Azerbaijan in 2019, and Eritrea and Zimbabwe in 2020 were, in part, self-initiated by the TPSC
due to this compliance review strategy.107
The USTR has held two hearings for ongoing reviews of specific country practices on November
29, 2018 and January 30, 2020. The hearings were held for the following countries: Azerbaijan
(worker rights), Bolivia (worker rights), Ecuador (arbitral awards), Georgia (worker rights),
Indonesia (intellectual property rights), Iraq (worker rights), Kazakhstan (worker rights), South
Africa (intellectual property rights), Thailand (worker rights and market access), Ukraine
(intellectual property rights), and Uzbekistan (worker rights and intellectual property rights).108 In
addition, both hearings included discussions on the country designation review for Laos.109 In
October 2020, the USTR announced that the country practices investigations for Bolivia,
Georgia, Indonesia (market access), Iraq, and Uzbekistan had been resolved with no loss of GSP
benefits.110 The GSP re-designation review for Laos ended without granting GSP eligibility.111
Country practices reviews of Azerbaijan, Ecuador, Indonesia (IPR), Kazakhstan, South Africa,
and Ukraine are still ongoing.112
On August 16, 2018, the USTR announced the initiation of a GSP country practice review of
Turkey focusing on the requirement of a GSP beneficiary to “assure the United States that it will
provide equitable and reasonable access to its market.” A hearing was held on September 26,
2018.113 Turkey’s GSP eligibility was revoked instead because it had received a sufficient level of
economic development.114

106 USTR, “USTR Announces New Enforcement Priorities for GSP,” press release, October 2017, https://ustr.gov/
about-us/policy-offices/press-office/press-releases/2017/october/ustr-announces-new-enforcement. Division M, Section
501(c) of P.L. 115-141, required that the USTR write an annual report on efforts to ensure that BDCs are meeting the
eligibility criteria specified in the GSP Law (expires December 31, 2020). USTR, “USTR Announces GSP Enforcement
Actions and Successes for Seven Countries,” October 25, 2019. USTR, “USTR Announces GSP Enforcement Action,
Country Successes, and New Eligibility Reviews,” Press Release, October 30, 2020.
107 USTR, “Initiation of Country Practice of India, Indonesia, and Kazakhstan,” 83 Federal Register 18618, April 27,
2018. USTR, “Generalized System of Preferences (GSP): Notice Regarding the Initiation of a Country Practice Review
of Turkey,” 83 Federal Register 40839, August 16, 2018.
108 USTR, “Generalized System of Preferences (GSP): Notice Regarding a Hearing for Ongoing Country Practice
Reviews of Bolivia, Ecuador, Georgia, Indonesia, Iraq, Thailand, and Uzbekistan and the Ongoing Country
Designation Review of Laos,” 83 Federal Register 52048, October 15, 2018.
109 Ibid.
110 Ibid. Country practice reviews do not have definitive termination dates. The TPSC provides its findings and
recommendations to the President.
111 USTR, Ongoing Country Reviews: Active and Recently Closed GSP Country Practices Reviews, November 2020,
https://ustr.gov/issue-areas/preference-programs/generalized-system-preferences-gsp/current-reviews/ongoing-country.
112 Ibid.
113 USTR, “Generalized System of Preferences (GSP): Notice Regarding the Initiation of Country Practice Review of
Turkey,” 83 Federal Register 40839, August 16, 2018. A transcript of the hearing is available at
https://www.regulations.gov/docket?D=USTR-2018-0031. See CRS Report R45249, Section 232 Investigations:
Overview and Issues for Congress
, coordinated by Rachel F. Fefer.
114 Proclamation 9887 of May 16, 2019, “To Modify the List of Beneficiary Developing Countries Under the Trade Act
of 1974,” 84 Federal Register 23425, May 20, 2019.
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Effects of the U.S. GSP Program
The statutory goals of the U.S. GSP program are 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 markets; and (4) promote trade
liberalization in developing countries.115 It is difficult to assess whether or not the program alone
has achieved these goals, however, because GSP is only one of many initiatives used by the
United States to assist poorer countries. Economic success within countries is also related to
internal economic and other factors, such as governance, stability, wise policy decisions,
availability of infrastructure to foster industry, and legal/financial frameworks that encourage
foreign investment. External macroeconomic factors, including global economic growth,
worldwide economic shocks, exchange rates, and regional stability may also influence the growth
of developing countries.
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
From 2000 to 2008, total U.S. imports from all GSP countries (see Figure 4, red line, includes
imports entering the United States without preferential tariff treatment) increased dramatically by
value, from $172 billion in 2000 to a peak of $384 billion in 2008. In 2009, imports from GSP
countries decreased by 36% (to $246 billion) in 2009, largely due to the effects of the global
economic downturn. Total imports increased to $367 billion in 2011, but decreased gradually to
$238 billion in 2014, $207 billion in 2015, and $202 billion in 2016. In 2017, total imports from
all GSP countries increased to $220 billion (up 12% from 2016) and again in 2018 to $238.3 (up
8% from 2017). The overall decline in total imports from GSP-eligible countries from 2012 to
2016 could have been due to an overall reduction in commodity prices,116 combined with
geopolitical tensions, tightening of financial conditions, and political instability in some
countries.117
Imports entering under the GSP program (see Figure 4, blue line, represents only imported
products that qualify for GSP duty-free treatment) have been relatively static, averaging about
11% of all imports from GSP countries.118 A number of factors could explain this, including
uncertainty based on short-term GSP program renewals and long pauses between program
authorization periods. Other programmatic factors that could keep GSP imports fairly constant
over time include suspension, termination, or graduation of some countries from GSP eligibility;
exclusion of certain products from eligibility through CNLs; and the entry of some developing

115 P.L. 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 effects on U.S.
producers and workers and compliance with GATT obligations.
116 For example, several LDBDCs export petroleum products to the United States, many of which are GSP-eligible.
117 World Bank, Global Monitoring Report 2015/2016: Developing Goals in an Era of Demographic Change, 2015, pp.
117-118, https://openknowledge.worldbank.org/handle/10986/22547.
118 GSP trade data are estimated for 2013 and 2014 (when GSP had expired) based on U.S. entries of goods filed
electronically with a Special Program Indicator (SPI) designating them as eligible for GSP benefits. In addition,
African Growth and Opportunity Act (AGOA) countries continued to receive GSP benefits despite GSP expiration.
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countries (many of which had been GSP beneficiaries) into FTAs with the United States and thus
being disqualified from GSP eligibility. In addition, some products from BDCs may receive more
favorable treatment under other trade preference programs, such as AGOA or the Caribbean Basin
Initiative (CBI).119
Figure 4. U.S. Imports from GSP Beneficiary Countries
2000 to 2019, in current U.S. dollars

Source: CRS analysis of data from ITC Trade Dataweb.
Many developing countries with a natural competitive advantage in certain products use trade
preferences such as GSP to gain a foothold in the international market. For example, India and
Thailand, two countries with well-established jewelry industries, were able to expand their
international reach through GSP programs. As the jewelry products reached their CNL thresholds,
those countries were no longer eligible to receive duty-free status for their jewelry products under
GSP, but gained a foothold in the U.S. and international markets that enabled their jewelry
industries to continue to be competitive.120
However, some developing countries could also be encouraged by preferential trade programs to
develop industry sectors in which they might not otherwise ever be able to compete, thus
diverting resources from other industries that might stand a better chance of becoming
competitive over time (trade diversion).121
Some economists assert that the lack of reciprocity in the GSP program could result in long-term
costs for beneficiary countries, because by not engaging in multilateral, reciprocal negotiations in

119 World Bank, World Integrated Trade Solution (WITS) database. http://wits.worldbank.org.
120 Gold neck chains and other jewelry products continue to be leading products imported under GSP, but imports of
these products from India and Thailand under GSP have been replaced by GSP imports from Turkey, South Africa,
Indonesia, Pakistan, and Bolivia.
121 OECD, “Making Open Markets Work for Development,” Policy Brief, October 2005, p. 2.
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favor of preference programs, these countries keep in place protectionist trade policies that could
ultimately impede their long-term growth. The nonreciprocal preferences could also become an
impediment to multilateral trade negotiations because beneficiaries may prefer to seek ways of
maintaining them rather than exchanging them for reciprocal benefits.122 Nonreciprocal access,
particularly for countries with large or rapidly growing domestic markets, may also contribute to
concerns over “fairness” in the U.S. trading relationship among policymakers.123
For these reasons, some economists prefer multilateral, nondiscriminatory tariff cuts because
preferential tariff programs, such as GSP, could lead to inefficient production and trade patterns in
developing countries.124 They say that 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—exporting products that they produce relatively efficiently and importing products
that others produce relatively efficiently.125
Economic Effects on the U.S. Market
In 2019, products valued at $21.0 billion (imports for consumption) entered the United States
duty-free under the GSP program, out of $235.1 billion worth of imports from all eligible BDCs.
In comparison, total U.S. imports from all countries for 2018 amounted to about $2.5 trillion.
These figures suggest that the overall effects of GSP on the U.S. economy are relatively small. In
addition, most U.S. producers of import-competing products are largely protected from severe
economic impact. First, certain products, such as most textile and apparel products, are
designated as “import sensitive” and therefore ineligible for duty-free treatment. Second, CNLs
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.126 Third, U.S.
manufacturers or producers may petition the USTR to withdraw GSP benefits from a certain
product if they are injured by the preference.127
In federal budgetary terms, according to the Congressional Budget Office cost estimate for the
most recent GSP reauthorization legislation (P.L. 115-141), the GSP program was projected to
cost the United States (in foregone tariff revenues) about $347 million in 2018, $475 million in
2019, $492 million in 2020, and $129 million in 2021, for a total of about $1.44 billion.128

122 Patrick Low, Roberta Piermartini, and Jurgen Richtering, Multilateral Solutions to the Erosion of Non-Reciprocal
Preferences in NAMA
, World Trade Organization, Economic Research and Statistics Division, Working Paper ERSD-
2005-05, October 2005. R. E. Baldwin and T. Murray, “MFN Tariff Reductions and Developing Country Trade
Benefits Under the GSP,” The Economic Journal, vol. 87, no. 345 (March 1977), pp. 30-46.
123 For example, Ambassador Lighthizer expressed concerns over the issue during a House Ways and Means
Committee hearing on June 17, 2020. For the hearing transcript, see
https://waysandmeans.house.gov/legislation/hearings/2020-trade-policy-agenda.
124 Bernard Herz and Marco Wagner, The Dark Side of the Generalized System of Preferences, German Council of
Economic Experts, Working Paper 02/2010, February 2010, p. 27.
125 Ibid.
126 19 U.S.C. §2463(c).
127 15 C.F.R. part 2007.0(a).
128 Congressional Budget Estimate for House Rules Committee Print 115-66, the Consolidated Appropriations Act,
2018, March 22, 2018, https://www.cbo.gov/publication/53669. The U.S. government employs a retrospective tariff
system, therefore, even if the GSP program expires at the end of calendar year 2020, certain 2020 GSP entries may
formally be “liquidated” in calendar year 2021.
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Many U.S. manufacturers and importers benefit from the lower cost of consumer goods and raw
materials imported under the GSP program.129 U.S. demand for certain individual products,
including jewelry, leather, and aluminum, is quite significant.130 The Coalition for GSP, a group of
U.S. companies and associations that benefit from, and advocate for, the GSP program, asserts
that companies in 40 states paid at least $1 million in higher tariffs due to the GSP expiration in
2014, with California firms paying an estimated $100 million in tariffs.131 It asserts that, during
periods of GSP expiration, small and medium enterprises (SMEs) bear a disproportionate share of
the burden, resulting in lower sales and lost jobs.132 It is also possible, however, that other factors,
including slower growth and reduced demand in the U.S. market, contribute to adverse economic
impacts on these businesses.
Stakeholders’ Concerns
Supporters of the GSP program include beneficiary developing country governments and
exporters, U.S. importers, and U.S. manufacturers who use inputs entering under GSP in
downstream products. Some Members of Congress favor GSP renewal, because they believe it is
an important development and foreign policy tool. Opposing the program are some 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.133 Many of these countries have built industries
or segments of industries based on receiving certain tariff preferences.
Some in Congress and in previous Administrations have expressed the desire to see reciprocal
trade relationships with some of the emerging market economies that are still beneficiaries of
nonreciprocal U.S. preference programs.134 The Trump Administration has also expressed
reservations with the program’s reauthorization, citing interest in working with Congress to

129 Coalition for GSP, Lost Sales, Investments, and Jobs: Impact of GSP Expiration After One Year, September 16,
2014.The Coalition for GSP, a coalition of more than 600 U.S. companies and organizations in support of GSP
renewal, makes the case that nonrenewal of GSP costs U.S. businesses an estimated $2 million per day in additional
tariffs, see http://renewgsptoday.com.
130 In some product categories, imports under GSP account for 25% or more of total U.S. imports. For example, in
2013, 94% of copper stranded wire in HTS 7413.00.10; 76% of ferrochromium in HTS 7272.41.00; 72% of cocoa paste
in HTS 1803.20.00; and 70% of plywood sheets of 6mm thick and under in HTS 4412.31.40 were imported under the
GSP program. GSP expired on July 31, 2013.
131 Coalition for GSP, Lost Sales, Investments, and Jobs: Impact of GSP Expiration After One Year, September 16,
2014.
132 Ibid.
133 For example, see World Trade Organization, Committee on Trade and Development, Special and Differential
Treatment Provisions in WTO Agreements and Decisions
, Note by the Secretariat, WT/COMTD/W/196, June 14, 2013,
at http://www.wto.org/english/tratop_e/devel_e/dev_special_differential_provisions_e.htm.
134 For example, see U.S. Congress, Senate Committee on Finance, The African Growth and Opportunity Act at 14: The
Road Ahead
, 113th Cong., 2nd sess., July 30, 2014.
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reform country eligibility criteria.135 At the same time, there is continued broad support for
preference programs in general, including GSP, CBI, and AGOA.136
Erosion of Preferential Margins
Developing countries have expressed concern about the overall progressive erosion137 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
Organisation for Economic Co-operation 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.138 Some
economists point out that if multilateral rounds of tariff reductions continue, combined with the
proliferation of bilateral and regional trade agreements, the preference may disappear completely
unless GSP tariff headings are expanded to include more import-sensitive products.139
One example of present concern of preference erosion could be WTO efforts to provide duty-free,
quota-free (DFQF) U.S. market access for all products to all least-developed countries. Many
sub-Saharan African countries have expressed concern that an approach like this could place them
in direct competition for U.S. market share with other developing countries, thus diluting the
value of the preferential treatment that they receive through AGOA.140
Other economists say that preference erosion could be more than outweighed by the benefits of
increased market access brought about by multilateral trade liberalization.141 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.”142
Expanding GSP eligibility for additional products, especially textile and apparel products, may
erode preferential benefits for beneficiary countries under AGOA and CBI. On October 2, 2020,
some Members of Congress introduced legislation that would have opposed the inclusion of
textile and apparel products as eligible for designation under GSP.143 It would have stated several

135 U.S. Congress, Senate Committee on Finance, Hearing on The President’s 2020 Trade Policy Agenda, Questions
for the Record for Ambassador Robert Lighthizer, 116th Cong., June 17, 2020.
136 Inside U.S. Trade, “Bipartisan Support Shown for CBTPA’s Renewal, but Some Want Link to GSP,” September 11,
2020.
137 While overall multilateral preferences may be eroding, tariff benefits for individual items are still quite significant.
For example, the U.S. tariff on flashlights (eligible for duty-free access for all BDCs) is 12.5% ad valorem. Some GSP-
eligible jewelry items have tariffs as high as 13.5%.
138 Organisation for Economic Co-operation 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%, in the EU 26%, in
Japan 34%, and in the United States, 50% (hereinafter OECD study).
139 Sanchez Arnau, Juan C. The Generalized System of Preferences and the World Trade Organization, London:
Cameron May, Ltd., 2002, p. 282.
140 Alliance to End Hunger, et al. Letter to House Ways and Means and Senate Finance Chairs and Ranking Members,
April 22, 2009. African Ambassador’s Group Statement, May 13, 2013.
141 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.
142 OECD GSP Review, p. 27.
143 H.Res. 1178.
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reasons for opposing the inclusion of the products, including potential harm to domestic
industries as import-sensitive items and possible erosion of existing preferential treatment of
textile and apparel products to certain Latin American and Caribbean countries as well as sub-
Saharan African countries under regional trade preference programs. Regional programs, such as
the CBI, also established strong supply chain networks and bilateral trade relations between the
United States and Latin American and Caribbean beneficiary countries. Policymakers and
industry groups that oppose the inclusion of textile and apparel products argue that expanding
GSP eligibility to those products would weaken existing supply chain networks by providing
preferential benefits to countries outside the region.144
Underutilization of GSP
Some academic literature on preference programs, including GSP and free trade agreements,
suggests that they are not used to their fullest extent. One reason cited is that the benefits accruing
to importers may not be worth the additional costs (such as the additional paperwork needed to
fulfill the local content rule of origin) associated with claiming the preference.145 One method of
calculating preference utilization by country is by taking the share of eligible imports that claimed
preferential status (i.e., GSP) over total imports of eligible products (i.e., GSP plus NTR
imports).146 In 2019, by import value, the overall GSP utilization rate was around 43.1%.147 The
utilization of the top 10 GSP beneficiary countries by import value is shown in Figure 5.

144 Office of Congressman Albio Sires, "Congressman Sires and Colleagues Introduce Bipartisan Resolution to Protect
Supply Chains in the Western Hemisphere and Sub-Saharan Africa," press release, October 6, 2020,
https://sires.house.gov/media-center/press-releases/congressman-sires-and-colleagues-introduce-bipartisan-resolution-
to; National Council of Textile Organizations, "NCTO Supports House Resolution Opposing Expansion of Generalized
System of Preferences Program (GSP) to Include Apparel, Textiles, Footwear," press release, October 6, 2020.
145 Shushanik Hakobyan, “Accounting for Underutilization of Trade Preference Programs: The U.S. Generalized
System of Preferences,” August 2012, p. 1.
146 The utilization rate is calculated using a formula from Alexander Keck and Andreas Lendle, New Evidence on
Preference Utilization
, World Trade Organization, Staff Working Paper ERSD-2012-12, September 3, 2012, p. 6.
147 CRS analysis of import data from ITC Trade Dataweb, calculated using a formula from Alexander Keck and
Andreas Lendle, New Evidence on Preference Utilization, World Trade Organization, Staff Working Paper ERSD-
2012-12, September 3, 2012, p. 6. Does not include GSP-eligible products limited to LDBDCs.
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Figure 5. Utilization Rates of Top 10 U.S. GSP Beneficiary Countries in 2019

Source: CRS analysis of data from ITC Trade Dataweb.
Notes: *India (as of May 2019) and Turkey (as of June 2019) are no longer GSP beneficiaries and data reflect
their partial year of eligibility.
Additional literature suggests that some countries may not use GSP for a variety of reasons,
including exporters being unfamiliar with the program; BDC governments not sufficiently
promoting the existence of available opportunities under the preference program; lack of
available infrastructure (for example, undeveloped or damaged roads and ports that impede the
efforts to get goods into the international market); developing countries’ major products could be
deemed import sensitive; or a combination of all of these factors.148 One option for addressing
these factors could be to provide assistance to GSP beneficiaries through U.S. trade capacity
building efforts similar to those employed as part of AGOA.149 The relatively long-term
reauthorization of AGOA also may have encouraged beneficiary countries to develop utilization
strategies.150
Trade as Foreign Assistance
No other U.S. trade preference program is more broadly based or encompasses as many countries
as GSP. As a result, the program is supported by many observers who believe that it is an
effective, low-cost means of providing economic assistance to developing countries. Supporters
maintain that encouraging trade by private companies through the GSP program stimulates
economic development much more effectively than intergovernmental aid and other means of

148 U.S. Government Accountability Office. International Trade: U.S. Trade Preference Programs Provide Important
Benefits, But a More Integrated Approach Would Better Ensure that Programs Meet Shared Goals
. GAO 08-443,
March 2008, pp. 53-55 (hereinafter 2008 GAO Report).
149 For more information, see CRS Report R43173, African Growth and Opportunity Act (AGOA): Background and
Reauthorization
, by Brock R. Williams.
150 AGOA was extended from September 30, 2015, to September 30, 2025, in Section 103 of P.L. 114-27.
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assistance.151 Economic development assistance through trade is a long-standing element of U.S.
foreign policy, and other trade promotion programs such as AGOA and CBI are also based on this
premise.
Conditionality of Preferences
Some supporters of GSP and other nonreciprocal programs assert that the conditions required
(such as worker rights and IPR requirements) for GSP qualification provide the United States
with leverage that can be used to promote U.S. economic and foreign policy goals and
interests.152 For example, after Bangladesh’s suspension from GSP benefits in June 2013 due to
worker rights and safety issues, officials in Bangladesh reportedly have been working closely
with U.S. officials to address the shortcomings.153
In November 2013, the United States and Bangladesh signed a Trade and Investment Cooperation
Forum Agreement (TICFA), through which the United States and Bangladesh agreed to more
regularly work together to address issues of concern the trade and investment relationship. In
September 2018, the last meeting of the TIFCA Council, officials on both sides pledged to deepen
their engagement on these issues. However U.S. officials also expressed concerns regarding
overall labor reforms and the need for Bangladesh to continue to collaborate with the private
sector on worker safety.154 The United States is also working with Bangladesh through
engagement in a “Sustainability Compact,” a multi-government approach that also involves the
governments of the EU and Canada, as well as the International Labor Organization (ILO), “to
promote continuous improvements in labor rights and factory safety in the Ready Made Garment
and Knitwear Industry in Bangladesh.” The last review of the compact also took place in July
2018. The compact members noted that more work needed to be done in terms of aligning
Bangladesh’s labor legislation with international labor conventions and implementation.155
In the 116th Congress, different legislation was introduced that would modify GSP’s eligibility
criteria. For example, measures included provisions that would have added eligibility criteria on
gender equality and human rights, good governance, and environmental law and regulation as
well as revising the provisions on worker rights.156
Lower Costs of Imports
U.S. businesses that import components, parts, or materials duty-free under the GSP maintain that
the preferences result in lower costs for these intermediate goods which, in turn, can make U.S.

151 September 21, 2006, DC Bar meeting.
152 The Coalition for GSP and the Trade Partnership. The U.S. Generalized System of Preferences Program, February
2013, p. 3, at http://tradepartnership.com/gsp/us-generalized-system-of-preferences/. See also
http://renewgsptoday.com.
153 Proclamation 8997 of June 27, 2013, “To Modify Duty-Free Treatment Under the Generalized System of
Preferences, and for Other Purposes,” 78 Federal Register 39949, July 2, 2013.
154 U.S. Trade Representative, “United States and Bangladesh Hold 4rd Trade and Investment Cooperation Forum
Agreement Council Meeting,” press release, September 2018. “Bangladesh’s Best Days are Ahead, says USTR,”
bdnews24.com, May 19, 2017, https://bdnews24.com/business/2017/05/19/bangladeshs-best-days-are-ahead-says-ustr.
155 European Commission, Implementation of the Bangladesh Compact – Technical Status Report, September 2018,
https://trade.ec.europa.eu/doclib/docs/2018/september/tradoc_157426.pdf.
156 Senator Casey introduced the Women’s Economic Empowerment in Tract Act of 2020 (S. 4007) and
Representative Blumenauer introduced a bill to modify and extend the GSP program (H.R. 8884).
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firms more competitive, and the savings can be passed on to consumers. These supporters assert
that GSP is as important for many domestic manufacturers and importers as for the countries that
receive preferential access for their products.157
Even though most U.S. producers are shielded to a certain extent by CNLs and the exclusion of
import-sensitive products from GSP eligibility, U.S. manufacturers and workers are still
sometimes adversely affected by GSP imports. Some of these companies have petitioned for
elimination of specific products from GSP eligibility.158 For example, in 2010, Exxel Outdoors, a
U.S. company that manufactures certain non-down sleeping bags, petitioned for their removal
from GSP eligibility, claiming that their business operations were being harmed by imports of
duty-free sleeping bags from Bangladesh under the GSP program.159 These sleeping bag
categories were ultimately removed from GSP duty-free treatment in January 2012.160
Options for Congress
The GSP program expired on December 31, 2020. Congress may consider reauthorizing the
program and whether to reauthorize it with a retroactive refund clause for U.S. imports may
receive refunds on duties paid on GSP-eligible products.
In previous years, some Members have suggested various reforms of the GSP program. Possible
options include supporting reciprocal tariff and market access benefits through FTAs, renewing
the GSP for least-developed beneficiaries only, extending the program in a modified form, or
letting the program lapse altogether.
Although the GSP is a nonreciprocal tariff preference, any changes to the program may 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 may need to notify—and possibly
consult with—other WTO members regarding any withdrawal or modification of GSP benefits, as
required by paragraph 4 of the Enabling Clause.161 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.
Negotiate Trade Agreements with GSP Countries
Some U.S. policymakers have suggested that developing countries might benefit more through
WTO multilateral negotiations, FTAs, or some form of agreement that could also provide
reciprocal trade benefits and improved market access for the United States.162 Arguably, this was
one of the policy arguments for the EU’s pursuit of Economic Partnership Agreements with many
of its former GSP beneficiaries. Since tariff concessions under these agreements could apply to

157 Coalition for GSP, “American Companies Frustrated by Congress’ Inability to Renew Generalized System of
Preferences Program,” press release, August 1, 2013, http://renewgsptoday.com/.
158 19 U.S.C. §2463(c).
159 “Sleeping Bags Removed from GSP after USTR Administrative Review,” Inside U.S. Trade, January 5, 2012.
160 77 Federal Register 1549, January 10, 2012.
161 Paragraph 4 states that any contracting party that grants a preferential program and seeks to modify or withdraw it
must notify the other contracting parties, give them adequate time and opportunity to discuss any difficulties, and help
them to reach satisfactory solutions. See http://www.wto.org/english/docs_e/legal_e/enabling1979_e.htm.
162 For example, then-USTR Froman indicated that he favored negotiating an FTA with South Africa on July 29 and
30, 2014. See Inside U.S. Trade, “Froman Signals Interest in ‘Reciprocal’ Trade Arrangement with South Africa,” July
31, 2014.
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more sectors of the economy than GSP, such agreements could increase the likelihood of spurring
across-the-board economic growth in developing countries. Each one of the United States’ current
FTA partners, with the exception of Canada and Australia, was at one time a beneficiary of the
GSP program.163
Authorize GSP Only for Least-Developed Countries
Some in Congress have expressed the possibility of modifying the GSP so that the benefits apply
primarily to least-developed beneficiaries. The Trump Administration has in effect taken some
steps in this direction by removing GSP eligibility from some more “advanced” developing
countries, such as India and Turkey.
Narrowing the scope of eligibility, could benefit the least-developed countries (LDC) that remain
in the program by reducing competition in the U.S. market from more advanced developing
countries. Assuming that many least-developed African beneficiaries164 would continue to receive
the GSP preference under AGOA, other LDCs that might benefit from an LDC-only GSP
program are Afghanistan, Bhutan, Burma, Burundi, Cambodia, Congo (Kinshasa), Haiti,165
Kiribati, Mauritania, Nepal, Samoa, Somalia, South Sudan, the Solomon Islands, Timor-Leste,
Tuvalu, and Vanuatu.166
Of these countries, in 2019, the LDCs that made the most use of GSP by value were Cambodia
($1.6 billion), Burma ($284 million), Nepal ($12.5 million), the Solomon Islands ($3.7 million),
Samoa ($2.9 million), Burundi ($1.5 million), Haiti ($1.4 million), and Afghanistan ($1.1
million).167 Alternatively, greater U.S. efforts through trade capacity building could also help
LDCs take greater advantage of the GSP program.
Reform GSP
Congress could change the GSP eligibility criteria, as it applies to all BDCs. Some of these
options could have the effect of expanding the GSP program, while others could serve to restrict
its application. Below are some examples of potential modifications.

163 Some U.S. FTA partners were GSP beneficiaries at the time FTA implementing legislation was enacted. Singapore
and South Korea were graduated from GSP in 1989, and thus were not GSP beneficiaries at the time the United States
implemented their respective FTAs. Israel retained GSP status until 1995, and Jordan still enjoys GSP status.
Implementing language for all other FTAs contained language similar to “the President shall terminate the designation
of ... as a beneficiary developing country for the purposes of title V of the Trade Act of 1974 on the date of entry into
force of the Agreement.”
164 The least-developed GSP countries that also benefit from AGOA (as of September 2019) are: Angola, Benin,
Burkina Faso, Central African Republic, Chad, Comoros, Djibouti, Ethiopia, The Gambia, Guinea, Guinea-Bissau,
Lesotho, Liberia, Madagascar, Malawi, Mali, Mozambique, Niger, Rwanda, Sao Tome and Principe, Senegal, Sierra
Leone, Tanzania, Togo, Uganda, and Zambia.
165 Haiti is also member of the Caribbean Basin Trade Partnership Act (CBTPA) and also receives additional unilateral
preferences through legislation such as the Haiti Economic Lift Act of 2010 (P.L. 111-171).
166 Burundi, Congo (Kinshasa), Mauritania, Somalia, South Sudan, and Zimbabwe are not designated as beneficiary
AGOA countries in 2019, but retain their GSP eligibility.
167 International Trade Commission Trade Dataweb (http://dataweb.usitc.gov). Trade figures are for least-developed
GSP beneficiaries using 2019 annual data.
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Expand Application of GSP
Were Congress to expand or enhance application of the GSP, the following options could be
considered:
 Expand the list of tariff lines permitted duty-free access. Allow some import-
sensitive products to receive preferential access.168
 Increase flexibility of rules of origin (ROO) requirements. For example, allow
more GSP beneficiaries to cumulate inputs with other beneficiaries to meet the
35% domestic content requirement or lower the domestic content requirement.169
 Eliminate competitive need limitations for BDCs, or raise the thresholds that
trigger them.
 Reauthorize GSP for longer terms or make the program permanent.
Restrict Application of Preferences
The following is a list of possible approaches if Congress desired to extend the program but
restrict imports under GSP:
 Consider mandatory graduation for “middle income” countries, similar to EU
GSP changes, or strengthen the language giving the President authority to
graduate countries based on competitiveness.
 Reconsider criteria for graduation of countries from GSP or direct greater
enforcement of the eligibility criteria.
 Strengthen provision that allows graduation of individual industry sectors within
beneficiary countries.
 Modify the ROO requirement for qualifying products to require that a greater
percentage of the direct costs of processing operations (currently 35%) originate
in beneficiary developing countries or introduce separate ROO requirements for
possible addition of textiles and apparel products.170
 Lower the threshold at which the President may (or must) withdraw, suspend, or
limit the application of duty-free treatment of certain products (CNLs).171
 Require the President to more frequently and actively monitor (currently an
annual process) the economic progress of beneficiary countries, as well as
compliance with GSP criteria.
 Reform eligibility criteria to strengthen provisions on worker rights as well as
introduce new criteria, such as good governance, gender equality, and
environmental law and regulation.

168 For example, sections 202 and 204 of P.L. 114-27 permitted duty-free access to certain textile articles and travel
goods.
169 2008 GAO Report, p. 75. The GSP, at present, allows only specifically designated “associations of countries,” (e.g.,
the Member Countries of the West African Economic and Monetary Union (WAEMU)) to combine inputs to reach the
35% threshold.
170 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 designated association of countries. For beneficiary countries under
AGOA, this percentage may also include up to 15% (as to value) of U.S. origin (19 U.S.C. §2466a(b)(2)).
171 19 U.S.C. §2463(c).
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Appendix A. GSP Implementation and Renewal
Table A-1. GSP Implementation and Renewal, 1974-2015
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, Title
August 6, 2002
December 31, 2006
Extended retroactively from
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.
P.L. 110-436, Section 4
October 16, 2008
December 31, 2009
Extended before program
lapse.
P.L. 111-124
December 28, 2009
December 31, 2010
Extended before program
lapse.
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Public Law
Effective Date
Date Expired
Notes
P.L. 112-40
November 5, 2011
July 31, 2013
Extended retroactively from
December 31, 2010, to
November 5, 2011.
P.L. 114-27, Title II
July 29, 2015
December 31, 2017
Extended retroactively from
July 31, 2013, to July 29, 2015.
P.L. 115-141, Division M, Title
April 22, 2018
December 31, 2020
Extended retroactively from
V
January 1, 2018, to April 22,
2018.
Source: CRS analysis using Congress.gov, http://www.congress.gov.
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Appendix B. GSP Beneficiary Countries
Table B-1. Beneficiary Developing Countries and Regions for Purposes of the
Generalized System of Preferences
(as of December 2020)
Independent Countries
Afghanistan A+
Ecuador
Liberia A+
Serbia
Albania
Egypt
North Macedonia
Sierra Leone A+
Algeria
Eritrea
Madagascar A+
Solomon Islands A+
Angola A+
Eswatini
Malawi A+
Somalia A+
Argentina
Ethiopia A+
Armenia
Fiji
Maldives
South Africa
Azerbaijan
Gabon
Mali A+
South Sudan A+
Belize
Gambia, The A+
Mauritania A+
Sri Lanka
Benin A+
Georgia
Mauritius
Suriname
Bhutan A+
Ghana
Moldova
Tanzania A+
Bolivia
Grenada
Mongolia
Thailand
Bosnia and Hercegovina
Guinea A+
Montenegro
Timor-Leste A+
Botswana
Guinea-Bissau A+
Mozambique A+
Togo A+
Brazil
Guyana
Namibia
Tonga
Burkina Faso A+
Haiti A+
Nepal A+
Tunisia
Burma A+
Indonesia
Niger A+
Tuvalu A+
Burundi A+
Iraq
Nigeria
Uganda A+
Cambodia A+
Jamaica
Pakistan
Ukraine
Cameroon
Jordan
Papua New Guinea
Uzbekistan
Cape Verde
Kazakhstan
Paraguay
Vanuatu A+
Central African
Kenya
Philippines
Zambia A+
RepublicA+
Chad A+
Kiribati A+
Republic of Yemen A+
Zimbabwe
Comoros A+
Kosovo
Rwanda A+

Congo (Brazzavil e)
Kyrgyzstan
Saint Lucia

Congo (Kinshasa) A+
Lebanon
Saint Vincent and the

Grenadines
Cote d’Ivoire
Lesotho A+
Samoa A+

Djibouti A+

Sao Tome and Principe A+
Dominica

Senegal A+

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Nonindependent Countries and Territories Eligible for GSP Benefits
Anguil a
Heard Island and McDonald Islands
Tokelau
British Indian Ocean Territory
Montserrat
Virgin Islands, British
Christmas Island (Australia)
Niue
Wallis and Futuna
Cocos (Keeling) Islands
Norfolk Island
West Bank and Gaza Strip
Cook Islands
Pitcairn Islands
Western Sahara
Falkland Islands (Islas Malvinas)
Saint Helena

Associations of Countries (treated as one country)
Member Countries of the
Member Countries of the West Qualifying Member Countries
Cartagena Agreement
African Economic and
of the Association of South
(Andean Group)
Monetary Union (WAEMU)
East Asian Nations (ASEAN)
Bolivia
Benin
Burma
Ecuador
Burkina Faso
Cambodia
Cote d’Ivoire
Indonesia
Guinea-Bissau
Philippines
Mali
Thailand
Niger
Senegal
Togo
Qualifying Member Countries
Qualifying Member Countries
Member Countries of the
of the Southern Africa
of the South Asian Association
Caribbean Common Market
Development Community
for Regional Cooperation
(CARICOM)
(SADC)
(SAARC)
Belize
Botswana
Afghanistan
Mauritius
Bhutan
Dominica
Tanzania
Maldives
Grenada
Nepal
Guyana
Pakistan
Jamaica
Sri Lanka
Montserrat
Saint Lucia
Saint Vincent and the Grenadines
Source: Harmonized Tariff Schedule of the United States, 2020, Revision 28, accessed December 2020.
Note: “A+” indicates least-developed countries.


Author Information

Vivian C. Jones
Liana Wong
Specialist in International Trade and Finance
Analyst in International Trade and Finance


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