The Generalized System of Preferences (GSP) program allows about 5,000 products from about 127 developing countries to enter the United States on a duty-free basis. The African Growth & Opportunity Act (AGOA) program provides duty-free access for products of sub-Saharan African exporters entering the United States.
Both programs help exports from developing countries to be competitive in the U.S. market. US importers who rely on the programs gain access to lower-priced consumer goods and manufacturing inputs.
Unfortunately for the importers who rely on GSP, the program has been expired since August 1, 2013. And, unless renewed by the U.S. Congress, AGOA will expire on September 30th of this year (2015). Fortunately, a bill that provides hope for US importers who use AGOA & GSP is making its way through the U.S. Congress.
The Trade Preferences Extension Act of 2015 may undergo more changes in order to finally pass both the U.S. House and Senate and go to President Obama for signature. In its current form, the bill:
Main AGOA Provisions:
- Renews AGOA until September 30, 2025
- Slightly relaxes the rules of origin — allows the direct costs of processing operations performed in one or more AGOA beneficiary country to be incorporated into the criteria used to determine if an African product qualifies for AGOA
- Requires the President to give at least 60-days’ notice to suspend a country’s eligibility for AGOA
- Recommends that countries develop AGOA utilization strategies every two years with the help of US capacity building agencies
Main GSP Provisions:
- Renews GSP until December 31, 2017
- Allows companies to claim refunds for duties paid since the program expired on July 31, 2013
- Extends GSP eligibility to certain cotton products and to handbags, luggage, and flat goods
Importers, exporters, and other affected businesses can track the progress of this bill and/or call Congress to voice their opinions.
It is almost guaranteed that, should the bill pass no one will get everything that they want. Yet, it is what currently provides hope for US importers who use AGOA & GSP.
Contact us for help with taking advantage of AGOA, CBI, GSP & other trade preference programs.
