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3.4 Preferences under Unilateral Programmes

A. Generalised System of Preferences (GSP)

GSP is a programme designed to promote economic growth in the developing world by providing preferential duty-free treatment for products from some 129 designated beneficiary developing countries (BDCs) and territories. The GSP programme was instituted on 1 January 1976 and authorised under the Trade Act of 1974 for a ten-year period. It was most recently renewed in 2009, when President Obama signed legislation reauthorising the programme through 2010. However, the program lapsed on 1 January 2011 and it had not been renewed as of 1 February 2011.

a) Eligible Items

A good is eligible for GSP duty‑free treatment only if it (a) is the growth, product or manufacture of a beneficiary country or has been substantially transformed into a new or different article of commerce in a beneficiary country; (b) is imported directly from a beneficiary country into the customs territory of the US; and (c) meets a value-added requirement.

b) Designation in the “Special” Column of the HTSUS

“A” for articles that are GSP-eligible for all BDCs

“A+” for articles that are GSP-eligible only for LDBDCs

“A*” for articles that are GSP-eligible except for imports from one or more specific BDCs that have lost GSP eligibility for that article

c) Eligible Countries

See HTSUS General Note 4(a) and (b) for the official list of GSP-eligible BDCs and LDBDCs (www.usitc.gov/tata/hts/bychapter/index.htm).

d) Additional Information

  • CBP Web site:
    http://www.cbp.gov/xp/cgov/trade/trade_programs/international_agreements/special_trade_programs/gsp_gen_system/.
  • USTR Web site:
    http://www.ustr.gov/trade-topics/trade-development/preference-programs/generalized-system-preference-gsp.

B. African Growth and Opportunity Act (AGOA)

AGOA provides duty-free treatment under the GSP to certain articles that would normally be excluded from GSP provisions. It also provides for duty-free entry of specific textile and apparel articles. Preferential treatment for certain eligible textiles and apparel is subject to specific limitations.

AGOA became effective on 1 October 2000. The AGOA Acceleration Act of 2004 extended AGOA benefits to 2015 and a special textile rule for lesser-developed countries to September 2007. The lesser-developed country rule was subsequently extended through September 2012.

a) Beneficiary Countries

A current list of designated countries is available at www.agoa.gov.

b) Eligible Items

The Trade Act of 1974 authorises the president to provide duty-free treatment under the GSP to certain articles that would otherwise be excluded from such treatment. A variety of products have been designated as eligible for duty-free treatment for beneficiary sub-Saharan African countries, including: (a) some watches and clocks, (b) certain electronics; (c) certain steel and metals; (d) certain textiles and apparel; and (e) certain semi-manufactured and manufactured glass products.

Duty-free treatment is extended to essentially all imports except textiles and apparel as long as the products (a) are the growth, product or manufacture of a beneficiary sub-Saharan African country; (b) are imported directly from a beneficiary sub-Saharan African country into the customs territory of the US; (c) meet a value-added requirement; and (d) are not determined by the president to be import-sensitive in the context of imports from beneficiary sub-Saharan African countries. A list of products eligible for duty-free treatment under the AGOA is available on-line at www.agoa.gov.

AGOA also provides duty-free benefits to imports of certain textile and apparel articles produced in eligible sub-Saharan African countries. In most instances, these benefits are available regardless of the total volume of apparel exported from eligible countries to the US.

c) Designation in the “Special” Column of the HTSUS

“D”

d) Additional Information

  • CBP Web site:
    http://www.cbp.gov/xp/cgov/trade/trade_programs/international_agreements/special_trade_programs/agoa_african_growth/.
  • African Growth and Opportunity Act Implementation Guide:
    www.agoa.gov.

C. Caribbean Basin Initiative (CBI/CBERA/CBTPA)

The US trade programmes known collectively as the Caribbean Basin Initiative (CBI) are intended to facilitate the economic development and export diversification of the Caribbean Basin economies. Initially launched in 1984 through the CBERA and expanded in 2000 through the CBTPA, the CBI provides 18 beneficiary countries with duty-free access to the US market for most goods. The CBTPA is scheduled to expire on 30 September 2020.

The CBI was amended in 2006 to incorporate the provisions of the Haitian Hemispheric Opportunity through Partnership Encouragement Act (HOPE). HOPE provides duty-free treatment to certain products from Haiti, including certain wiring sets and apparel made with certain foreign inputs. This program was amended in 2008 (HOPE II) by expanding existing trade preference provisions and creating new ones, including the Earned Import Allowance Program. The Haiti Economic Lift Program Act of 2010 (HELP) further amended the CBI by significantly expanding US tariff preferences for apparel imports from Haiti in response to the devastation caused by a January 2010 earthquake. Among other things, the legislation increased from 70 million square metres equivalent (SME) to 200 million SME the existing TPLs for knitted and woven apparel imports from Haiti. The increase will be triggered automatically if TPL utilisation reaches 52 million SME, approximately a 74.3 percent utilization rate. Once the increase is triggered, certain knitted tops will be subject to an 85 million SME sub-limit under the knitted apparel TPL while cotton and man-made fibre woven trousers will be subject to a 70 million SME sub-limit under the woven apparel TPL. HELP also expanded the list of textile and apparel items that qualify for duty-free treatment in the US regardless of the origin of their inputs, provided they are wholly assembled or knitted-to-shape in Haiti.

a) Eligible Items

HTSUS General Notes 7 and 17 set forth the eligibility provisions pertaining to the CBERA and the CBTPA. The provisions of the Haiti HOPE, HOPE II and HELP acts can be found under Subchapter XX of HTSUS Chapter 98 (see www.usitc.gov/tata/hts/bychapter/index.htm).

b) Beneficiary Countries

See HTSUS General Notes 7 and 17 for a list of beneficiary countries: www.usitc.gov/tata/hts/bychapter/index.htm.  

c) Designation in the “Special” Column of the HTSUS

“E” or “E*” for CBERA eligible articles

“R” for CBTPA eligible articles

d) Additional Information

  • CBP Web site:
    http://www.cbp.gov/xp/cgov/trade/trade_programs/international_agreements/special_trade_programs/caribbean/.
  • USTR Web site:
    http://www.ustr.gov/trade-topics/trade-development/preference-programs/caribbean-basin-initiative-cbi.

D. Andean Trade Promotion and Drug Eradication Act (ATPDEA)

The Andean Trade Preferences Act (ATPA) was enacted in 1991 to combat drug production and trafficking in Bolivia, Colombia, Ecuador and Peru. The Andean Trade Promotion and Drug Eradication Act (ATPDEA), enacted in 2002, renewed and amended the ATPA to provide duty-free treatment for certain products previously excluded from the programme. The US suspended Bolivia’s participation in the programme on 15 December 2008 for non-compliance with certain counternarcotics co-operation criteria. In addition, ATPA/ATPDEA preferences for Peru expired at the end of 2010 because that country’s FTA with the US has been implemented. The ATPA/ATPDEA programme expired on 13 February 2011 although Congress was expected to renew it during the first half of 2011 and provide retroactive preferential duty treatment to qualifying imports from Colombia and Ecuador.

a) Eligible Items

In general, the ATPDEA expanded the ATPA’s trade benefits to include additional products such as apparel made of US fabric, Andean apparel made of regional fabric subject to a cap, and certain tuna. 

HTSUS General Note 11 contains a list of beneficiary countries and eligibility provisions pertaining to ATPDEA (see www.usitc.gov/tata/hts/bychapter/index.htm).

b) Designation in the “Special” Column of the HTSUS

“J”, “J*” or “J+”

c) Additional Information

  • CBP Web site:
    http://www.cbp.gov/xp/cgov/trade/trade_programs/international_agreements/special_trade_programs/atpa/.
  • USTR Web site:
    http://www.ustr.gov/trade-topics/trade-development/preference-programs/andean-trade-preference-act-atpa.
Content provided by Hong Kong Trade Development Council
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