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Issue #586 | Latin America Trade | Canada Ports

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NCBFAA urges long-term renewal, caution in addressing GSP

By: | at 07:00 PM | Channel(s): International Trade  

In an Oct. 28 letter to the Office of US Trade Representative, Federico Zuniga, President of the National Customs Brokers and Forwarders Association of America, Inc. (NCBFAA) urged the “timely and long-term renewal of GSP [Generalized System of Preferences] program.” GSP is a US program that grants duty-free treatment, on a product-by-product basis, to developing countries and is intended to help developing nations start selling to US markets.

In calling for a long-term renewal of the program, the NCBFAA President explained: “The most recent renewal of GSP in 2001 for a period of more than five years was a welcome change from the short, sporadic and uncertain renewals in the decade preceding the 2001 renewal. Although we understand the procedural and bureaucratic reasons for this situation, the short renewals were very damaging to many US businesses and counterproductive to the goals of the GSP program.”

President Zuniga called the “timely and long-term renewal” of the program the “single most important point as the expiration of GSP approaches at the end of next year.”

The Federal Register notice asked for specific comment on whether the operation of the GSP should be modified to enable beneficiaries that have not previously been major traders under the program to increase their participation and whether some beneficiaries are sufficiently competitive with respect to trade in eligible products that they should no longer be designated as GSP beneficiaries. NCBFAA expressed concern that “any significant changes to the program will create an environment of controversy that will delay renewal of the program.”

The NCBFAA letter also cautioned the Administration not to assume that, by graduating the larger GSP beneficiary nations, the smaller countries will benefit. President Zuniga explained, “In a very competitive, global marketplace, if a country loses its GSP eligibility, US companies will seek an alternative supplier who can provide reliable service at the lowest cost. Since the least developed GSP countries often lack the production capability as well as the infrastructure, China may very well become the alternative supplier. Not only would this diminish the effectiveness of GSP, it would exacerbate the gaping trade deficit with China.”