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Trump grants full GSP benefits to travel goods; USTR launches review of Bolivia

June 29, 2017

Fulfilling the demands of travel goods importers and sellers -- as well as members of Congress from both sides of the aisle -- President Trump on June 29 granted full duty-free benefits to all Generalized System of Preferences countries for certain travel goods.

The Office of the U.S. Trade Representative also kicked off a review of Bolivia’s compliance with GSP requirements. That review will focus on Bolivia’s implementation of commitments to eliminate forms of child labor and afford workers internationally accepted rights, according to a USTR release. A 2014 law passed in Bolivia allowing child labor starting at age 10 calls into question whether Bolivia’s current practices conform to its obligations as a GSP beneficiary, USTR said.

“The Trump Administration is committed to vigorously enforcing the eligibility criteria of our trade preference programs,” said U.S. Trade Representative Robert Lighthizer. “Trade under GSP provides strong incentives for developing countries to make market-oriented reforms and provide greater access for American goods and services. The actions announced today are aimed at strengthening our trade enforcement efforts and supporting U.S. manufacturing.”

USTR, after deciding last June to extend GSP benefits for travel goods from non-least developed and non-AGOA countries, came under fire from members of Congress and the travel goods industry. President Obama's USTR, Michael Froman, in January punted the decision to extend duty-free, quota-free preferences for exports of travel goods to the U.S. from GSP countries to the incoming Trump administration.

The decision to fully grant those benefits to travel goods will have no overall impact on the U.S. trade balance, but will improve sourcing options and could shift travel goods production from non-GSP countries to those that benefit from the program, USTR said.

“Today, the industry pays in excess of $90 million a year on duties, which can now be re-purposed towards well-paying jobs for U.S. workers, lower costs for U.S. consumers, and/or increased investments in product innovation. Additionally, this move will encourage diversification of the supply chain into developing economies, including the Philippines, Thailand, Pakistan, Indonesia, and Sri Lanka,” Rick Helfenbein, president and CEO of the American Apparel and Footwear Association said.

"Now we encourage Congress to move forward with the renewal of GSP before its expiration at the end of the year, and to approve legislation that would make select footwear eligible for GSP benefits going forward,” he added.

Bipartisan legislation to make certain non-import sensitive footwear acceptable to petition for inclusion in the Generalized System of Preferences program was introduced in the House in May. Sources have told Inside U.S. Trade that the Senate is likely to introduce a GSP footwear bill later this summer.

The presidential proclamation granting full GSP benefits to travel goods also added some other goods to the GSP list, including essential oils of lemon and certain rolled or flaked grains. USTR said products added to the GSP list are used as inputs by U.S. manufacturers. Glycine was removed from GSP eligibility and competitive need limitation waivers were provided and revoked for a small number of products. -- Jack Caporal (jcaporal@iwpnews.com)

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