Follow us on:

[The Hill] GSP nations urge renewal of trade program

Trade officials from nine countries are pressing lawmakers to renew the Generalized System of Preferences (GSP) they say are causing job losses and decreasing their U.S. imports.

Those GSP nations' leaders — from Indonesia, Kosovo, Mongolia, Nepal, Paraguay, the Philippines, Sri Lanka, Thailand and Uruguay — are joining forces and meeting Tuesday with Senate Finance and House Ways and Means committees' senior staff to urge rapid renewal of the GSP that they say affects 3.8 billion people in two-thirds of the world's economies.

The nations sent a letter to congressional leaders outlining the problems the four-month lapse in the program has created, including a 10.6 percent drop in U.S. imports of GSP-eligible items as the value of all U.S. imports grew by 19 percent, leading to a loss of product competitiveness in the United States.

"We have heard from companies throughout the United States whose limited resources are now severely burdened by the added costs of paying duties and are moving their sourcing away from suppliers in GSP countries," the letter said.

Those trade leaders argue in the letter that "the 36-year-old GSP program created by Congress has shaped the rise of the developing nations’ middle classes, has replaced illicit trades with legal employment, and has provided a future."

"Without GSP, the coalition’s products are losing hard-won market share in their respective sectors," they said. "Once lost, that market share will not be regained easily and will increase the already large U.S. market share held by non-GSP beneficiary countries with low production costs."

They also said that job losses are affecting women and those in rural areas as well as reducing investment.

The GSP is a program designed to promote economic growth in the developing world by providing preferential duty-free entry for up to 4,800 products from 129 designated beneficiary countries and territories.

The GSP program expired Dec. 31, 2010, and Congress has yet to reauthorize the program. The Obama administration has included renewal of the GSP as part of a broader trade agenda they want lawmakers to pass along with free-trade agreements with South Korea, Colombia and Panama.

The negative effects of a lapsed GSP is toughest on countries such as Kosovo, where imports under GSP were more than half of its total U.S. imports in 2010. Paraguay has accessed the U.S. market via GSP for 71.4 percent of its U.S. imports, and the least-developed beneficiary, Nepal, recorded more than 25 percent annual growth in GSP-claimed trade last year, despite the overall export drop.