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Generalized System of Preferences (GSP)

Generalized System of Preferences (GSP)

USFIA Position

The United States Fashion Industry Association (USFIA) strongly supports the GSP program, and applauds Congress for reauthorizing this non-controversial program in June 2015.

In addition, USFIA supports future extension of the program to include textiles, apparel, and accessories, which would foster broad-based economic development in beneficiary countries.

While USFIA understands the Administration’s action to suspend GSP benefits for Bangladesh in light of the labor concerns there, we hope the U.S. and Bangladeshi governments will work together with the private sector and labor groups to improve labor conditions so the U.S. can quickly restore GSP benefits to Bangladesh in the future.

Issue Summary

The U.S. Generalized System of Preferences (GSP) program promoted economic growth in both the United States and the developing world by providing duty-free treatment for approximately 5,000 products imported into the U.S. from the beneficiary countries and territories. The program is especially important to U.S. manufacturers, as many inputs are imported from GSP-eligible countries. Despite the positive benefits of the program for U.S. companies and jobs as well as developing countries, the program officially expired on July 31, 2013. In April 2015, legislation was introduced in the House and Senate to renew the Generalized System of Preferences (GSP) and add new products such as textile and leather travel goods, along with Trade Promotion Authority (TPA) and other trade bills. Both the House and Senate passed the preferences legislation, and President Obama signed the legislation on June 29, 2015. Now, we remain focused on ensuring successful implementation of the program.

Before the program expired in July 2013, the GSP program made more headlines when the United States suspended benefits for Bangladesh following the Rana Plaza tragedy earlier in the year. The suspension includes a plan to allow GSP benefits to be restored should Bangladesh make progress on labor issues, and, of course, should GSP be renewed in the future. GSP eligibility could be a strong incentive for Bangladesh to improve the labor compliance and worker safety situation in the manufacturing sector.

Finally, while many products had been eligible for duty-free treatment under GSP—including many manufactured items, chemicals, minerals and building stone, jewelry, carpet, and some agricultural products—most textiles, apparel, watches, footwear, handbags, and luggage were not eligible, despite the fact that these industries are often gateways to economic prosperity for the developing world and overwhelmingly employ women. 

USFIA Files Comments on GSP Hearing

On November 1, 2016, the United States Fashion Industry Association (USFIA) filed comments to the Office of the U.S. Trade Representative (USTR) on the hearing on the Initiation of the 2016 and 2017 Annual Generalized System of Preferences Product and Country Practices Review. USFIA expressed support for “expanding the Generalized System of Preferences (GSP) benefits to grant eligibility for all beneficiary countries to supply travel goods–items like luggage, backpacks, purses, and wallets.” However, we urged “the Administration to also designate the remaining GSP beneficiary countries as eligible to export all statutorily eligible travel goods into the U.S. market under the GSP,” and consider the testimony of brands and retailers who “shared their perspective about how expanded GSP benefits would be a benefit for American consumers as well as for manufacturers in developing countries.” USFIA’s comments are available here.

USFIA Joins Letter to Trump on GSP for Travel Goods

On March 20, 2017, the United States Fashion Industry Association (USFIA) joined a coalition letter to President Trump to designate all travel goods produced in qualified countries eligible for Generalized System of Preferences (GSP) benefits. “It was the articulated bipartisan will of Congress to designate all travel goods products duty-free when imported from all GSP countries. The situation and facts have been thoroughly vetted by Congress, the U.S. International Trade Commission, and the interagency Trade Policy Staff Committee (TPSC). The conclusion was unanimous: GSP benefits should apply to all eligible countries for all travel goods in question. This would spur real relocation of U.S. sourcing from China, which is not eligible for the GSP. It would also give the U.S. more enforcement leverage over the GSP countries’ trade policies and actions, which is a key aspect of the GSP program,” the letter states. The letter is available here.

USFIA Joins Letter to Obama on GSP for Travel Goods

On August 4, 2016, the United States Fashion Industry Association (USFIA) joined an industry letter to President Obama requesting approval of duty-free access for all 28 eligible travel goods categories under the Generalized System of Preferences (GSP) program for all GSP-eligible countries by October 1st. The letter is available here.

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