USTR Announces Deadline for GSP CNL Waivers, No Warning List to be Made Public

October 17, 2008

In the October 16, 2008 Federal Register, the United States Trade Representative announced November 13, 2008 will be the deadline for submitting competitive need limit (CNL) waivers as part of the 2008 Generalized System of Preferences (GSP) Annual Review. Under the GSP program, eligible articles from designated beneficiary developing countries (BDCs), receive duty free entry to the U.S., as long as they have been substantially transformed in the BDC.

The Trade Act of 1974, which authorized the GSP program, sets out two conditions under which country/article pairings are considered to have exceeded their “competitive need.” When the President determines that a BDC exported to the U.S. during a calendar year: (1) A quantity of a GSP-eligible article having a value in excess of the applicable amount for that year ($135 million for 2008), or (2) a quantity of a GSP-eligible article having a value equal to or greater than 50 percent of total U.S. imports from all countries (the “50 percent CNL”), the industry in the BDC is recognized as developed and the President must terminate preferential treatment for that country/article pairing.

Section 503(d) of the 1974 Act allows interested parties, including foreign governments and domestic importers, to submit product petitions requesting waivers for products that exceeded their CNLs. During previous reviews, USTR has published a warning list of country/article pairings it considers to be at risk of exceeding the specified CNLs. However, this year interested parties will be responsible for reviewing import data to see if their pairs are likely to exceed the 2008 CNL values.

The CNL exclusions, which will become effective July 1, 2009, will be based on full 2008 calendar year data. However, since that data will not be available until February 2009, the available data for 2008 should be examined now to determine which pairs are likely to exceed their 2008 CNLs and will need a waiver petition filed by November 13, 2008.