Washington, DC – The Office of the United States Trade Representative (USTR) announced today that President Trump is suspending $817 million in trade preferences for Thailand under the Generalized System of Preferences (GSP) program based on its lack of sufficient progress providing the United States with equitable and reasonable market access for pork products.
USTR also announced the closure of GSP eligibility reviews with no loss of benefits for three countries: Georgia, based on improvements in the protection of worker rights; Uzbekistan, also based on improvements in the protection of worker rights; and Indonesia, based on improvements aimed at providing the United States with equitable and reasonable market access. USTR also announced the closure of the GSP designation review of Laos with no change in status and the opening of two new GSP eligibility reviews of Eritrea and Zimbabwe, based on worker rights concerns.
“Today’s announcement demonstrates the effective use of the GSP program to improve labor standards and help U.S. businesses and workers succeed,” said U.S. Trade Representative Robert E. Lighthizer. “It also demonstrates the Trump Administration’s commitment to robust monitoring and enforcement of our trade preference programs and underscores that when countries do not meet the congressionally mandated eligibility criteria, we will take action by limiting their preferential duty-free access to the U.S. market.”
USTR also announced the results of the GSP annual product review, including addition of fresh-cut roses to, and removal of parboiled rice from, the list of goods eligible for GSP trade benefits.
Background
GSP, the largest and oldest U.S. trade preference program, is designed to promote economic development by allowing duty-free entry into the United States for 3,500 products from the 119 designated beneficiary countries and territories. To remain eligible for these advantages, beneficiary countries must comply with 15 statutory eligibility criteria, including taking steps to afford internationally recognized worker rights, providing adequate and effective protection of intellectual property rights, and assuring equitable and reasonable access to its markets.
Today’s announcement represents the culmination of three separate processes under the GSP program: determinations on ongoing GSP eligibility reviews of beneficiary countries, based on stakeholder petitions or self-initiation of reviews by USTR; triennial assessments of all beneficiary developing countries in the Middle East, North Africa, and sub-Saharan Africa to determine whether to launch new GSP eligibility reviews; and the annual GSP product review, which provides stakeholders the opportunity to request the addition of products to, and/or removal of products from, the list of goods eligible for duty-free treatment under GSP.
Outcomes of Ongoing GSP Eligibility Reviews
Thailand: Despite 12 years of bilateral engagement, Thailand has yet to provide the United States with equitable and reasonable market access for pork products, as outlined in a 2018 petition from the National Pork Producers Council (NPPC) requesting removal of GSP benefits. GSP eligibility will be revoked for approximately one-sixth of Thailand’s GSP trade, representing $817 million in U.S. imports under the GSP program in 2019. The decision is effective on December 30, 2020 and will close the review of Thailand. The list of products to be excluded from GSP for Thailand is focused on products for which the United States is a relatively important market for Thailand but where Thailand accounts for a relatively small share of U.S. imports. A full list of the products to be excluded from GSP for Thailand is available here.
Georgia: USTR is closing a GSP worker rights eligibility review of Georgia, originally opened in 2012, after Georgia passed legislation in September 2020 that grants labor officials the authority to conduct unannounced inspections and enforce internationally recognized worker rights in all sectors of the economy. The new, expanded enforcement authority builds on other significant legal protections for workers enacted during the course of the review. The United States will continue to engage with the Government of Georgia to promote effective implementation of the new authorities.
Uzbekistan: USTR is closing the GSP worker rights eligibility review of Uzbekistan opened in 2008. The ILO monitoring program found no systematic use of child labor in the cotton harvest and a continued decline in forced adult labor for the fifth year in a row. The government has criminalized the use of forced adult labor and abolished cotton production quotas. The government has also significantly raised the wage rate for cotton pickers, thereby greatly increasing the pool of voluntary labor. The United States will continue to engage with the Government of Uzbekistan to promote further progress in the elimination of forced labor in Uzbekistan’s cotton harvest.
Indonesia: USTR is closing the GSP market access eligibility review of Indonesia opened in 2018, following positive steps that Indonesia has taken to address a broad range of trade and investment issues. These positive steps address U.S. concerns related to market access for U.S. goods, services, and agricultural products, and include specific reforms to Indonesia’s digital trade, insurance and reinsurance, and agricultural import policies. Indonesia has agreed to continue to work with the United States to ensure the successful implementation of these policies for the benefit of both countries.
Laos: In 2013, Laos requested that it be designated as a GSP beneficiary. Following a lack of recent engagement by the government of Laos on the worker rights eligibility criterion, USTR is closing the GSP designation review without a change in status.
New GSP Eligibility Reviews
In October 2017, USTR announced a new triennial process to assess GSP beneficiary country eligibility. The first year’s assessment covered the GSP beneficiary countries in Asia and the Pacific and the second year’s covered the GSP beneficiary countries in Europe and the Western Hemisphere. This year’s assessment covered the 54 GSP beneficiary countries in the Middle East, North Africa, and sub-Saharan Africa. For each country, USTR and other U.S. Government agencies, including the Departments of State, Labor, Treasury, Agriculture, Commerce, Homeland Security, and others, examined national policies and practices related to each of the 15 eligibility criteria established by Congress.
As a result of this assessment, USTR is self-initiating GSP eligibility reviews for Eritrea and Zimbabwe, based on concerns related to compliance with the GSP worker rights criterion. The concerns in Eritrea relate to forced labor associated with Eritrea’s national service requirement as well as a lack of freedom of association. Labor rights concerns in Zimbabwe relate to a lack of freedom of association, including the rights of independent trade unions to organize and bargain collectively, and government crackdown on labor activists.
2020 GSP Product Review
The proclamation President Trump signed today adds fresh-cut roses (HTS 0603.11.00) to, and removes parboiled rice (HTS 1006.30.10) from, the list of goods that are eligible for GSP trade benefits. The proclamation also waived Competitive Need Limitations (CNLs) for products in which total imports are below the $24.5 million GSP de minimis level. Finally, the proclamation removed GSP eligibility for six products from Argentina, Brazil, Ecuador, and Indonesia that exceeded the $190 million CNL threshold for imports from a single country, above which the GSP statute requires removal of the product from eligibility.
A full list of decisions on the product petitions accepted for review in 2020 can be found here.
For more information on the GSP program, visit the GSP page on the USTR website here.
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