{"id":2908,"date":"2020-12-30T22:24:34","date_gmt":"2020-12-30T22:24:34","guid":{"rendered":"https:\/\/griit.org\/?p=2908"},"modified":"2024-01-29T14:20:23","modified_gmt":"2024-01-29T14:20:23","slug":"end-of-a-trade-program-tomorrow-will-bring-changes-for-u-s-importers-in-the-new-year-by-pamela-flores","status":"publish","type":"post","link":"https:\/\/griit.org\/end-of-a-trade-program-tomorrow-will-bring-changes-for-u-s-importers-in-the-new-year-by-pamela-flores\/","title":{"rendered":"End of a Trade Program Tomorrow Will Bring Changes for U.S. Importers in the New Year by Pamela Flores"},"content":{"rendered":"\n

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Overview of the GSP<\/strong><\/p>\n\n\n\n

The U.S. General System of Preferences\nis a program that provides duty-free tariff treatment on over 3,500 products\nthat are imported from beneficiary countries that are underdeveloped. The GSP\nhelps progress in third world countries by encouraging worker rights and labor\nlaws. It also helps American companies to grow as essential goods are being\nbrought into the country in abundance and in an affordable way.<\/p>\n\n\n\n

According to the Office\nof the U.S. Trade Representatives<\/a>, the United States benefits from the\nprogram by “boosting American competitiveness by reducing costs of imported\ninputs used by U.S. companies to manufacture goods in the United States. The\nGSP is especially important to U.S. small businesses, many of which rely on the\nprograms’ duty savings to stay competitive.â€<\/p>\n\n\n\n

The program has been active since it was\nfirst authorized under the Trade Act of 1974 and came into effect on January 1,\n1976. Thereafter, it has been reactivated 14 times with a duration of 3 or 4\nyears by period. The current GSP is set to expire on December 31st<\/sup>.  The debate regarding the effectiveness of the\nprogram and whether to reform it continues.  <\/p>\n\n\n\n

The GSP is meant to increase trade with\nand promote economic growth among  developing countries.<\/p>\n\n\n\n

Lessons from the Expiration of the GSP\nin 2013 and 2017<\/strong><\/p>\n\n\n\n

Companies faced increased costs. <\/em>When the GSP expired for two years in 2013, companies\npaid $1.3 billion in extra tariffs. <\/p>\n\n\n\n

“Another lapse in December 2017 that\nlasted nearly four months cost businesses $145 million in the first two months\nof 2018 alone. This cost continued to grow until the GSP went back into effect\nin April 2018,†wrote the Heritage Foundation in a September\n2020<\/a> report. <\/p>\n\n\n\n

My take…<\/strong><\/p>\n\n\n\n