GSP Changes Under Review Include Reinstatements, Revocations, Addition of Cotton Products

Excerpt from: Sandler, Travis & Rosenberg Trade | July 7 2015

CNL Waivers. GSP provides for the duty-free importation of designated articles when imported from designated BDCs. When the president determines that a BDC exported to the United States during a calendar year either (1) a quantity of a GSP-eligible article having a value in excess of the applicable amount for that year ($165 million for 2014) or (2) a quantity of a GSP-eligible article having a value equal to or greater than 50 percent of the value of total U.S. imports of the article from all countries (the 50 percent CNL), the president must terminate GSP duty-free treatment for that article from that BDC.

However, the president may waive the 50 percent CNL with respect to an eligible article imported from a BDC if the value of total imports of that article from all countries during the calendar year did not exceed the applicable de minimis amount for that year ($22 million for 2014).

USTR has determined that coconuts otherwise prepared or preserved (HTSUS 2008.19.15) and copper alloys, wire, coated or plated with metal (HTSUS 7408.29.10) from Thailand exceeded the 50 percent CNL and will be removed from GSP eligibility on Oct. 1 unless the president grants a waiver in response to a petition filed by an interested party.

In addition, dozens of articles exceeded the 50 percent CNL but are eligible for a de minimis waiver and will automatically be considered in this review without the need to file a petition. Products onDepositphotos_gustavofrazao this list include certain flowers, vegetables, nuts, fruits, grains, chemicals, hides and skins, fabrics, carpets, gloves and mittens, ceramic tiles, jewelry, audiovisual equipment, brooms and smoking pipes.
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Revocation of CNL Waivers. A CNL waiver remains in effect until the president determines that it is no longer warranted due to changed circumstances. Each year the president is encouraged to revoke any waiver that has then been in effect with respect to an article for five years or more if the BDC has exported to the United States (directly or indirectly) during the preceding calendar year a quantity of the article (1) having an appraised value in excess of 1.5 times the applicable amount for that calendar year or (2) exceeding 75 percent of the appraised value of the total imports of that article into the United States during that calendar year.

USTR has determined that the following three articles are subject to CNL waiver revocation: plywood sheets not over 6 mm thick (HTSUS 4412.31.40) from Indonesia; copper, stranded wire (HTSUS 7413.00.10) from Turkey; and copper, cables, plaited bands and the like (HTSUS 7413.00.50) from Turkey.

Redesignations. If imports of an eligible article from a BDC ceased to receive duty-free treatment due to exceeding a CNL in a prior year, the president may redesignate such an article for duty-free treatment if imports in the most recently completed calendar year did not exceed the CNLs.

Dozens of goods are currently not receiving GSP duty-free treatment but may be considered for GSP redesignation based on 2014 trade data and consideration of certain statutory factors. These include certain fish, vegetables, fruits, lentils, grains, sugar, tobacco, chemicals, plastic bags, rubber tires, hides and skins, wood, flooring panels, building stone, porcelain and ceramic articles, jewelry, metal products, engines and engine parts, electronics, auto parts and cigarette lighters.

Possible Designation of New Products. Five cotton products are being considered for GSP eligibility for LDBDCs.

  • HTSUS 5201.00.18, 5201.00.28 and 5201.00.38 – certain cotton, not carded or combed, of various specified staple lengths
  • HTSUS 5202.99.30 – certain cotton card strips made from cotton waste
  • HTSUS 5203.00.30 – certain cotton fibers, carded or combed

Effective Dates. Because GSP was only recently reauthorized, USTR has established July 31 as the deadline for submitting petitions for CNL waivers for certain products as well as comments on possible de minimis CNL waivers, redesignations of articles not currently eligible for GSP benefits, revocation of CNL waivers and designation for GSP eligibility for LDBDCs of the five cotton products. A public hearing on CNL waiver petitions and the cotton product proposal will be held Aug. 11, with pre-hearing briefs and requests to appear at the hearing due by July 31 and post-hearing briefs and comments due by Aug. 18.

The law reauthorizing GSP provides that the applicable deadline for all CNL-related actions based on import data from 2014 will be Oct. 1, 2015. Similarly, exclusions from GSP duty-free treatment where CNLs have been exceeded for 2014 will be effective Oct. 1 unless a waiver is granted.