In a letter addressed to Marideth J. Sandler, Chair of the GSP Subcommittee of the Trade Policy Staff Committee in the Office of the US Trade Representative, the National Customs Brokers and Forwarders Association of America, Inc. (NCBFAA) President Mary Jo Muoio called on the Administration to work closely with Congress to ensure a timely, long-term renewal of the Generalized System of Preferences (GSP).
‘The delayed, sporadic and uncertain renewals of the past were very damaging to many US businesses and counterproductive to the goals of the GSP program,’ she noted. ‘The financial and administrative burdens created by lapses in the GSP program are a serious drain on individual companies and we hope you will utilize every resource to assure a timely renewal of the program.’
The NCBFAA letter was in response to the GSP Subcommittee’s Request for Public Comments to determine whether major beneficiaries of the program have expanded exports or have progressed in their economic development to the extent that their eligibility should be limited, suspended or withdrawn.
President Muoio cautioned against removing countries such as Brazil or India from the GSP program arguing that an abrupt cut-off from the program would cause serious hardship for these countries without guaranteeing that US businesses will switch suppliers from a larger GSP country to a least developed country.
‘In fact, the least developed countries often lack the production capability as well as the infrastructure to become a reliable source for many products now sourced from Brazil, India or one of the other larger beneficiary countries,’ she pointed out. ‘A decision to remove one of these countries is essentially a lose-lose proposition.’
The effect of removing these countries from GSP will be felt by US companies that source from these GSP participants as well as the consumers who will have to pay higher prices when duties are imposed. ‘We believe Brazil, India and the other countries you have identified for review are essential to GSP and should remain in the program,’ she wrote.
Some companies rely on GSP to remain competitive and profitable in increasingly tight markets; thus the sudden loss of GSP would be a significant event for them. For this reason, Ms. Muoio urged the GSP Subcommittee and the Administration to complete this review and announce the outcome as soon as possible to allow US companies time to make adjustments.
‘It is our understanding that the decisions on whether to terminate competitive need limit waivers on specific products will take effect immediately upon announcement of the decision,’ she wrote. ‘We ask you to reconsider this policy and consider the disruptive impact such an immediate implementation would cause for US companies who will have to bear the brunt of an unexpected imposition of duties on products already in the pipeline.’