Friday, April 24, 2009

Is it Time for a New GSP?

Several organizations ranging from non-governmental relief agencies to retailers have written to USTR Ron Kirk suggesting first that the USTR pursue early renewals for all U.S. unilateral preferences to support the world's poorest countries.  The letter also suggests that the Generalized System of Preferences and other unilateral trade programs such as AGOA be combined into one simple, unified preference program for all developing countries that meet clear eligibility standards. The letter recommends a clear and consistent rule of origin applicable to all products and enhanced benefits for the least developed and sub-Saharan counties.

The proposal makes a lot of sense.  The difference between AGOA and GSP are minimal and in the details. which makes them annoying.  Moreover, the general purpose of both programs is the same: to give developing countries access to the US market and, therefore, incentives to attract investment and develop infrastructure to support an export economy, which generates jobs.  The US consumer gets access to quality products and reasonable prices.  It's a win-win.

Here's hoping the letter gets Mr. Kirk's attention.

1 comment:

Matt said...

I agree that simplification and convergence of these programs are good goals. But the letter itself seems to recognize policy reasons for more liberal origin requirements for sub-Saharan Africa countries. USTR under both parties has struggled for years with basic questions on unilateral preferences, e.g., expanded regional qualification to avoid driving sourcing to China; limited renewal periods to keep pressure on LDCs to remain committed to Doha; consistent disqualification for labor practices or unfair practices. Also, the proliferation of FTAs and decline of tariff rates in OECD countries changed the politics of GSP, and it seems to be moving toward an apparel beneficiary program.