The office of the United States Trade Representative (USTR) recently issued a notice identifying imported goods from certain beneficiary countries that may be removed from GSP eligibility for duty free treatment because their import levels exceed ”competitive need limits” (CNLs). Companies wishing to file petitions for the waiver of the CNL for any of these products must do so by November 16, 2007. This update provides additional background information on the GSP program, as well as information regarding the products subject to GSP removal and the waiver process.

I. Overview

The Generalized System of Preferences is a trade preference program designed to promote economic growth in developing countries by providing duty-free treatment to more than 3,000 products from more than 130 designated beneficiary countries and territories, and currently covers more than $25 billion worth of imports.

Imports from a particular developing country that are currently eligible for GSP treatment may be removed from such eligibility of imports meet specified CNLs. Eligible goods meet the CNL when the dollar value of imports into the United States exceeds either: (1) the statutory amount for that year ($130 million for 2007), or (2) 50 percent of the total value of U.S. imports of the same product (the “50 percent CNL”). Once either of these thresholds is reached, the specific import from that country does not qualify for GSP treatment effective July 1 of the following year.

The President may grant a waiver of the CNL for articles imported from specific countries in two situations. First, interested parties may petition the president to waive the CNLs with respect to certain articles; the deadline for submission of such a petition is November 16, 2007. Second, the President may also waive the 50 percent CNL with respect to an eligible product if the value of total imports of that article from all countries during the calendar year did not exceed the de minimis amount for that year ($18.5 million in 2007). Comments on de minimis waivers will not be requested until February 2008.

II. Specific goods targeted for removal from GSP

The USTR released a list of goods that have either already surpassed the CNL for 2007, or are on pace to do so by the end of the year. These products will no longer receive duty-free treatment under the GSP unless the CNL is waived after a successful petition. The majority of the products on the list qualify for a de minimis waiver as they do not exceed the minimum import limit.

However, some listed products that have exceeded the CNLs may no longer receive duty-free treatment unless an importer successfully petitions for a waiver. The Harmonized Tariff Schedule subheadings and specific country of origin of these goods are as follows: 

  • 2001.10.00 – India – cucumbers prepared by vinegar 
  • 2918.99.30 – India – Aromatic drugs derived from carboxylic acids 
  • 4107.19.50 – Brazil – Whole upholstery leather of bovines 
  • 4107.91.80 – Argentina – Full grain unsplit bovine & equine leather 
  • 4415.10.90 – Brazil – Wood cases, boxes, crates, and drums 
  • 7413.00.50 – Turkey – Copper, cables, plaited bands, and similar goods 
  • 7901.12.50 – Kazakhstan – Certain types of unwrought zinc 
  • 7907.00.20 – India – Zinc tubes or pipes and related zinc fittings 
  • 8103.90.00 – Kazakhstan – Tantalum 
  • 8528.72.16 – Thailand – Certain non-high definition television reception appliances 
  • 9602.00.50 – Colombia – Vegetable, mineral, or gum materials

Companies whose imports are currently duty-free under the GSP program should review the full list to determine if they will be affected by any proposed changes.