USTR Requests Comments on GSP Modifications to Add or Remove Duty Free Treatment Resulting from Competitive Need Limitations

March 9, 2010

The Office of the U.S. Trade Representative (USTR) has published a notice in the Federal Register announcing the availability of full year 2009 import statistics relating to  competitive need limitations (CNLs) under the Generalized System of Preferences (GSP) program.

Under the GSP program, eligible articles from designated beneficiary developing countries (BDCs) receive duty free entry to the U.S., provided they have been substantially transformed in the BDC. The Trade Act of 1974 sets forth two conditions under which country/article pairings are considered to have exceeded their “competitive need.” Pairings that have exceeded their competitive need will be relieved of their duty-free status unless the President grants it a CNL waiver.

Based off the full year 2009 import statistics, USTR has compiled four lists of articles to which GSP CNLs may apply as follows:

•  List I shows: a) articles from BDCs that were excluded from GSP treatment on or before July 1 2008, and b) GSP-eligible articles from BDCs that exceed the 2008 CNLs by U.S. imports being in excess of $135 million, or in an amount equal to or greater than 50% of the   total U.S. import value in 2008.
•  List II identifies GSP-eligible articles from BDCs that are above the 50% CNL, but that are eligible for a de minimis waiver of the 2008 50% CNL (2008 Trade is below $19 million).
• List III shows GSP-eligible articles from certain BDCs that are currently not receiving duty-free treatment, but that may be considered for redesignation based on 2008 trade data and consideration of certain statutory factors, as set forth in the Federal Register.
• List IV shows articles subject to the CNL waiver thresholds of section 503(d)(4)(B)(ii) of the Trade Act of 1974, as amended.

USTR is seeking comments, by 5 P.M. on March 25, 2010, on: (1) the potential revocation of CNL waivers that meet the statutory thresholds; (2) possible de minimis CNL waivers with respect to particular articles; and (3) possible redesignations under the GSP program of articles currently not eligible for GSP benefits because they previously exceeded CNLs. Interested parties are advised to conduct their own reviews of 2009 import data with respect to the GSP CNL provisions.

For more information on how to file comments and to view the lists of possible modifications, click here.