gsp - a comparison
TRANSCRIPT
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Table 1: Key Trade Preference Programs AvailableUnited States The European Union Canada
GSP Plus (GSP+)
Date Implemented
GSP January 1, 1976 GSP 1971 MFNAGOA October 1, 2000 GSP Plus (GSP+) January 1, 2006 GPT July 1, 1974
1991March 5, 2001 LDCT 1983
CBI & CBTPACCC
Expiration Date
GSP
GSP December 31, 201 MFN
AGOA September 30, 201
GSP Plus (GSP+) GPT June 30, 2014
EBA Permanent
LDCT June 30, 2014
CBI & CBTPACCC
Notes:
The Philippines is alread under the US GSP.
The Philippines and Viet Nam are among those granted GPT and MFN Tariff in Canada.
THE GENERALIZE SYSTEM OF PREFENCES (GSP)A COMPARISON ON THE SCHEME OF THE USA, EU and CANADA
Unilateral PreferencePrograms Offered
The Generalized System
of Preferences (GSP)
The Generalized System
of Preferences (GSP)
Most Favored Nation Tariff
(MFN)The African Growthand Opportunity Act (AGOA)
General Preferential Tariff (GPT)
The Andean Trade Partnershipand Drug Eradication Act (ATPDEA) Everything But Arms
(EBA)
Least Developed Countries'Tariff (LDCT)
and The Caribbean BasinTrade Partnership Act (CBTPA)
Commonwealth CaribbeanCountries (CCC)
ATPDEA (Andean PreferenceTrade Act) Everything But
Arms (EBA)January 1, 1984October 1, 2000en e onDecember 31,2010 (beneficiarycountries after January1, 2011 are subject toNormal TradeRelation duties )
2015, but new regulations ineffect from January 1,2009to December 31, 2011
ATPDEA (Andean TradePartnership and DrugEradication Act)
December 31, 2009for Colombia, Peru;June 30, 2009 forBolivia, Ecuador expired onFEBRUARY 11,2011
,CBTPA expired onSeptember 30,2010
In May (2008), Vietnam formally presented to the US a request to be designated as a beneficiary developing country under the U.S. GeneralizedSystem of Preferences Program. The US government is considering whether to grant GSP benefits to Vietnam.
However, statute that governs GSP states that duty-free treatment provided under the GSP shall not remain in effect after December31, 2010.As a result, imports of GSP products from GSP beneficiary countries arriving in the US on or after January 1, 2011, will be subject to regular,
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Vietnam and the Philippines fall under Group I in the GSP scheme of the European Community.
Table 2: Countries/Territories Covered
United States The European Union CanadaGSP GSP MFN
AGOA GSP PLUS GPT
ATPDEA EBA LDCT
CBI & CBTPA CCC
Table 3: PRODUCT ELIGIBILITY/COVERAGE
Table 4 : Duty TreatmentUnited States The European Union Canada
Approximately 132 developingcountries, including thoseeligible for other preferenceprogramsEXCEPT Cuba, China, Vietnam,Malaysia; 44 designated LDCs
176 Countriesand Territories,excluding noone of note.
includes Philippinesand Vietnam
Up to 41 Countries of Sub-SaharanAfrica.
Currently 16countries/territories
Approximately 173developing countries -also applies toPhilippines andVietnam(including China),excluding no one of note
Bolivia, Colombia,Ecuador and Peru;benefits for Bolivia have beentemporarily suspended
49 LeastDevelopedCountries;plus Cape Verde
49 Least DevelopedCountries
24 countriesin Central Americaand the Caribbean,
except Cuba
CommonwealthCaribbean Countries(e.g. St. Christopher &
Nevis, St. Lucia, St.Vincent and theGrenadines, Tonga, Turks& Caicos Islands, BritishVirgin Islands
(GSP)
(GSP) (GPT)
Out of approximately 6,700 dutiable tariff lines, close to 4,650products from developing countries receive dutiy-freetreatment, with LDCs receiving preferential treatment on morethan 1,400 additional items.
Approximately 6,350 products (of 7357dutiable products) receive preferentialtreatment, divided into sensitive (about3,900 tariff lines) and non-sensitive.
Under the GPT more than5,700 product tariff lines,or about sixty-seven percent of Canada's tariff schedule, enters the country duty-free. Theremainder faces tariffs lower than the MFN rates
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Zero for all preference programs GSP GPT
GSP PLUS
EBA LDCT
Table 5: Rules of OriginUnited States The European Union Canada
GPT
LDCT
Table 6: Eligibility CriteriaUnited States The European Union Canada
Zero for non-sensitiveproducts. Sensitiveproducts receive 3.5-percentage pointreduction in the MFNduty (for ad valorem
duties) . Productssubject to specificduties receive a 30percent reduction
Ranges from zero up tothe MFN rate, dependingon the product
Zero on allcovered products
delayedliberalization (for
Zero for all eligibleproducts
Generally: The value added in a beneficiary country must equal at least 35 per cent of theappraised value of the article at the time of entry into the US.Imported materials can be counted towards the value-addedrequirement only if they are "substantially transformed" intonew and different constituent materials of which the eligiblearticle is composed
Generally: The final productmust provide a change of tariff heading from the materials used toproduce it and the value of importedinputs must not exceed 40 percent of the value of the finished product
GPT allows fullcumulationamong beneficiaries,who must accountfor 60 percent of thefinal value
Textile and apparel benefitsunder AGOA, CBTPA, AND ATPDEAgenerally require that the article be wholly formed in thebeneficiary country using yarn and fabric from the UnitedStates or the beneficiary country. AGOA permits the usage of third country fabrics in limited quantities from the poorestcountries through 2012
Partial cumulation is permittedon a regional basis(subject to certain conditions).
Rules of origin are moreliberalthan under the GPT.Goods wholly produced inone or more LDCs qualifyfor treatment.Additionally, goodsoriginating in one or moreLDC with no more than 60percent of the valueoriginating outside of theLDC qualify forpreferential treatment.
Apparel produced in aLDC can use textile inputsfrom any developingcountry or Canada
The country:
a) is not a communist country (with some exceptions)
GSP benefits could be temporarily withdrawn in whole or in
part if countries engage in certain activities such asemploying slave or forced labor, prison labor, systematicviolation of the freedom of association and collectivebargaining, and rules of origin fraud, among others
None, but the Government of Canada
has removed countries from GPT andLDCT if they become members of theEuropean Union or if they violatecertain human rights
b) is not part of a cartel thatwitholds vital resourcesc) does not grant reverse preferences to other developed
d) has not nationalized or expropriated e) does not aid or abet individuals or groups that have
f) provides adequate and effective intellectual property right
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i) has asked for preferences
Table 7: LOSING BENEFITS/QUOTAS and GRADUATIONUnited States The European Union Canada
Products: No product cut-off formula.
Countries:
sources:UNILATERAL PREFERENTIAL TRADE PROGRAMSOFFERED BY THE UNITED STATES, THE EUROPEAN UNION,AND CANADA: A COMPARISONDaniel Anthony*December 2008The Trade Partnership1001 Connecticut Ave., NWSuite 1110Washington DC 20036________ * Daniel Anthony is the Director of Research and Government Relations for The Trade Partnership. Theviews expressed in this paper are solely those of the authors.
h) has implemented commitments to eliminate the worst form
j) does not exceed the per capita income threshold for
Specific products may lose GSPbenefits if imports from acountry exceed a dollarthreshold/import threshold - if U.S. imports of that productsurpass the designated CNL(Competitive Need Limit). In2009, the import threshold forproducts is defined at the 8-digittariff line level as $140 million,increasing by $5 million eachyear, or fifty percent of total U.S.imports of that product in theprevious calendar year.
Sectors may lose benefits if importsof the sector exceed 15 percent of allimports from all beneficiaries or acountry's trade in a specific sectorexceeds thresholds calculated by theEU.
(GSP only): In addition tochanged circumstancesregarding the eligibility criteria,countries lose benefits uponclassification as a high-incomecountry by the World Bank, or if a country has entered into a FTA
(Free Trade Agreement with theU.S. or a bilateral agreementwith another country (e.g.joining the European Union).
(GSP only): Countries lose GSP benefitsupon classification as a high-incomecountryby the World Bank for three consecutiveyears.
Graduation: No formal graduation mechanism exists, but Canada doesnot remove GPT benefits for countries that join the European Union
Ant ony, Danie . "Uni atera Pre erentia Tra e Programs O ere y t e Unite States, T e European Union, an Cana a: A Comaparison" T e Tra e Partners2008.Available athtt ://www.trade artnershi .com/ df files/GSP Com arison. df
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* Julia V. Sekkel is a Research Assistant, Center for Global Development.
Other sources:
Sekkel, Julia V. "Summary of Major Trade Preference Program."April 2009.Available athttp://www.cgdev.org/doc/Trade/Summary_of_Major_Trade_Preference_Programs_Final_12_09.pdf
UNCTAD (2010). "Generalized System of Preferences: Handbook on the Scheme of the United States of America" (UNCTAD/ITCD/TSB/Misc.62/Rev.4).Available athttp://www.unctad.org/en/docs/itcdtsbmisc58rev2_en.pdf
UNCTAD (2001). "Generalized System of Preferences: Handbook on the Scheme of Canada" (UNCTAD/ITCD/TSB/Misc. 66) - Advance Copy Available athttp://www.unctad.org/en/docs/itcdtsbmisc66_en.pdf
UNCTAD (2002). "Generalized System of Preferences: Handbook on the Scheme of The European Community" (UNCTAD/ITCD/TSB/Misc. 25/Rev. 2)Available athttp://www.erca.gov.et/GSP-EU.pdf
UNCTAD (2008). "Generalized System of Preferences:Handbook on the Scheme of the European Community" (UNCTAD/ITCD/TSB/Misc. 25/Rev. 3)Available athttp://www.unctad.org/en/docs/itcdtsbmisc25rev3_en.pdf htt ://www.unctad.or /tem lates/Pa e.as ?intItemID=1425&lan =1
http://investincanada.gc.ca/eng/advantage-canada/tax-advantage/tariffhttp://investincanada.gc.ca/eng/establish-a-business/faq.aspx?action=aThe Vietnam Trade Office and Sidley Austin LLP. "Frequently Asked Questions - Understanding Vietnam and GSP. June 2008.
www.regulations.govhttp://www.ustr.gov/trade-topics/trade-development/preference-prohttp://www.ecuadortimes.net/2011/02/11/atpdea-to-expire-tomorrow
http://investincanada.gc.ca/eng/advantage-canada/tax-advantage/tariff%E2%80%A6http://investincanada.gc.ca/eng/establish-a-business/faq.aspx?action=ahttp://www.regulations.gov/http://www.regulations.gov/http://www.ustr.gov/trade-topics/trade-development/preference-pro%E2%80%A6http://www.ecuadortimes.net/2011/02/11/atpdea-to-expire-tomorrow%E2%80%A6http://www.ecuadortimes.net/2011/02/11/atpdea-to-expire-tomorrow%E2%80%A6http://www.ustr.gov/trade-topics/trade-development/preference-pro%E2%80%A6http://www.regulations.gov/http://investincanada.gc.ca/eng/establish-a-business/faq.aspx?action=ahttp://investincanada.gc.ca/eng/advantage-canada/tax-advantage/tariff%E2%80%A6 -
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. Decem er
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Table 1: Key Trade Preference Programs AvailableUnited States The European Union Canada
GSP Plus (GSP+)
Date Implemented
GSP January 1, 1976 GSP 1971 MFNAGOA October 1, 2000 GSP Plus (GSP+) January 1, 2006 GPT July 1, 1974
1991
March 5, 2001 LDCT 1983CBI & CBTPA
CCC
Expiration Date
GSP
GSP December 31, 201 MFN
AGOA September 30, 201GSP Plus (GSP+) GPT June 30, 2014
EBA Permanent
LDCT June 30, 2014
CBI & CBTPACCC
Notes:
The Philippines is alread under the US GSP.
The Philippines and Viet Nam are among those granted GPT and MFN Tariff in Canada.
THE GENERALIZE SYSTEM OF PREFENCES (GSP)A COMPARISON ON THE SCHEME OF THE USA, EU and CANADA
Unilateral PreferencePrograms Offered
The Generalized Systemof Preferences (GSP)
The Generalized Systemof Preferences (GSP)
Most Favored Nation Tariff (MFN)
The African Growthand Opportunity Act (AGOA)
Tariff (GPT)
The Andean Trade Partnershipand Drug Eradication Act (ATPDEA) Everything But Arms
(EBA)
Countries'Tariff (LDCT)
and The Caribbean BasinTrade Partnership Act (CBTPA)
Commonwealth CaribbeanCountries (CCC)
ATPDEA (Andean PreferenceTrade Act) Everything But
Arms (EBA)January 1, 1984October 1, 2000en e onDecember 31,2010 (beneficiarycountries after January1, 2011 are subject toNormal TradeRelation duties )
2015, but new regulations ineffect from January 1,2009to December 31, 2011
ATPDEA (Andean TradePartnership and DrugEradication Act)
December 31, 2009for Colombia, Peru;June 30, 2009 forBolivia, Ecuador expired onFEBRUARY 11,2011
,CBTPA expired onSeptember 30,2010
In May (2008), Vietnam formally presented to the US a request to be designated as a beneficiary developing country under the U.S.Generalized System of Preferences Program. The US government is considering whether to grant GSP benefits to Vietnam.
However, statute that governs GSP states that duty-free treatment provided under the GSP shall not remain in effect after
December 31, 2010.As a result, imports of GSP products from GSP beneficiary countries arriving in the US on or after January 1, 2011, will be subject to
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Vietnam and the Philippines fall under Group I in the GSP scheme of the European Community.
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Table 2: Countries/Territories CoveredUnited States The European Union Canada
GSP GSP MFN
AGOA GSP PLUS GPT
ATPDEA EBA LDCT
CBI & CBTP CCC
THE GENERALIZE SYSTEM OF PREFENCES (GSP)A COMPARISON ON THE SCHEME OF THE USA, EU and CANADA
Approximately 132 developing countries,
including those eligible for otherpreference programsEXCEPT Cuba, China, Vietnam, Malaysia;44 designated LDCs
176 Countries andTerritories,excluding no one of
includes Philippines andVietnam
Up to 41 Countries of Sub-SaharanAfrica.
Currently 16 countries/territories
Approximately 173 developingcountries - also applies toPhilippines and Vietnam
Bolivia, Colombia,Ecuador and Peru;benefits for Bolivia have been temporarilysuspended
49 Least DevelopedCountries;plus Cape Verde
49 Least DevelopedCountries
24 countries
in Central Americaand the Caribbean,except Cuba
Commonwealth Caribbean Countries
(e.g. St. Christopher & Nevis, St.Lucia, St. Vincent and theGrenadines, Tonga, Turks & CaicosIslands, British Virgin Islands
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Table 3: PRODUCT ELIGIBILITY/COVERAGE
THE GENERALIZE SYSTEM OF PREFENCES (GSP)A COMPARISON ON THE SCHEME OF THE USA, EU and CANADA
United States(GSP)
e uropeanUnion(GSP)
Canada(GPT)
Out of approximately 6,700dutiable tariff lines, close to 4,650products from developingcountries receive dutiy-freetreatment, with LDCs receivingpreferential treatment on morethan 1,400 additional items.
Approximately 6,350products (of 7357dutiable products)receive preferentialtreatment, divided intosensitive (about 3,900tariff lines) and non-sensitive.
Under the GPT more than5,700 product tariff lines,or about sixty-seven percentof Canada's tariff schedule,enters the country duty-free. The remainder facestariffs lower than the MFNrates
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Table 4 : Duty Treatment
United States The European Union CanadaGSP GPT
GSP PLUS
EBA LDCT
THE GENERALIZE SYSTEM OF PREFENCES (GSP)A COMPARISON ON THE SCHEME OF THE USA, EU and CANADA
Zero for all
preferenceprograms
Zero for non-sensitive products.
Sensitive products receive 3.5-percentage point reduction inthe MFN duty (for ad valoremduties) . Products subject tospecific duties receive a 30percent reduction
Ranges from zero up to
the MFN rate,depending on theproduct
Zero on all coveredproducts
Zero duties for allproducts through delayedliberalization (for
bananas, sugar and rice)
Zero for all eligibleproducts
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Table 5: Rules of OriginUnited States The European Union Canada
GPT
LDCT
THE GENERALIZE SYSTEM OF PREFENCES (GSP)A COMPARISON ON THE SCHEME OF THE USA, EU and CANADA
Generally: The value added
in a beneficiary country must equalat least 35 per cent of the appraisedvalue of the article at the time of entry into the US. Imported materialscan be counted towards the value-added requirement only if they are"substantially transformed" into newand different constituent materials of which the eligible article is composed
Generally: The final productmust provide a change of tariff heading from the materials usedto produce it and the value of imported inputs must notexceed 40 percent of the valueof the finished product
GPT allows full cumulationamong beneficiaries,who must account for 60percent of the final value
Textile and apparel benefitsunder AGOA, CBTPA, AND ATPDEAgenerally require that the article bewholly formed in the beneficiarycountry using yarn and fabric fromthe United States or the beneficiarycountry. AGOA permits the usage of third country fabrics in limitedquantities from the poorest countriesthrough 2012
Partial cumulation is permitted
on a regional basis(subject to certain conditions).
Rules of origin are more liberalthan under the GPT. Goods whollyproduced in one or more LDCsqualify for treatment. Additionally,goods originating in one or moreLDC with no more than 60 percentof the value originating outside of the LDC qualify for preferentialtreatment. Apparel produced in aLDC can use textile inputs fromany developing country or Canada
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Table 6: Eligibility Criteria
United States The European Union Canada
i) has asked for preferences
THE GENERALIZE SYSTEM OF PREFENCES (GSP)A COMPARISON ON THE SCHEME OF THE USA, EU and CANADA
The country:a) is not a communist country (with someexceptions)
GSP benefits could be temporarilywithdrawn in whole or in part if countriesengage in certain activities such asemploying slave or forced labor, prisonlabor, systematic violation of thefreedom of association and collectivebargaining, and rules of origin fraud,among others
None, but the Government of Canadahas removed countries from GPT andLDCT if they become members of theEuropean Union or if they violatecertain human rights
b) is not part of a cartel thatwitholds vital resourcesc) does not grant reverse preferences toother developed countries
d) has not nationalized or expropriatedU. S. property
e) does not aid or abet individuals orgroups that have committed
international terrorismf) provides adequate and effectiveintellectual property right protections
g) is taking steps to provideinternationally recognized worker rights
h) has implemented commitments toeliminate the worst form of child labor
j) does not exceed the per capita incomethreshold for designation
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Table 7: LOSING BENEFITS/QUOTAS and GRADUATIONUnited States The European Union Canada
Products: No product cut-off formula.
Countries:
THE GENERALIZE SYSTEM OF PREFENCES (GSP)A COMPARISON ON THE SCHEME OF THE USA, EU and CANADA
Specific products may lose GSP benefits if
imports from a country exceed a dollarthreshold/import threshold - if U.S. imports of that product surpass the designated CNL(Competitive Need Limit). In 2009, the importthreshold for products is defined at the 8-digittariff line level as $140 million, increasing by $5million each year, or fifty percent of total U.S.imports of that product in the previous calendaryear.
Sectors may lose benefits if imports of
the sector exceed 15 percent of allimports from all beneficiaries or acountry's trade in a specific sectorexceeds thresholds calculated by theEU.
(GSP only): In addition to changedcircumstances regarding the eligibility criteria,countries lose benefits upon classification as ahigh-income country by the World Bank, or if acountry has entered into a FTA (Free TradeAgreement with the U.S. or a bilateralagreement with another country (e.g. joiningthe European Union).
(GSP only): Countries lose GSP benefitsupon classification as a high-income
countryby the World Bank for three consecutiveyears.
Graduation: No formal graduationmechanism exists, but Canadadoes not remove GPT benefits forcountries that join the European Union
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SOURCES:UNILATERAL PREFERENTIAL TRADE PROGRAMSOFFERED BY THE UNITED STATES, THE EUROPEAN UNION,AND CANADA: A COMPARISONDaniel Anthony*December 2008
The Trade Partnership1001 Connecticut Ave., NWSuite 1110Washington DC 20036________ * Daniel Anthony is the Director of Research and Government Relations for The Trade Partnership. Thviews expressed in this paper are solely those of the authors.
* Julia V. Sekkel is a Research Assistant, Center for Global Development.
Anthony, Daniel. "Unilateral Preferential Trade Programs Offered by the United States, TheEuropean Union, and Canada: A Comaparison" The Trade Partnership . December 2008.Available athttp://www.tradepartnership.com/pdf_files/GSP_Comparison.pdf
Sekkel, Julia V. "Summary of Major Trade Preference Program."April 2009.Available athttp://www.cgdev.org/doc/Trade/Summary_of_Major_Trade_Preference_Programs_Final_12_09.pdf
UNCTAD (2010). "Generalized System of Preferences: Handbook on the Scheme of the UnitedStates of America" (UNCTAD/ITCD/TSB/Misc.62/Rev.4).Available athttp://www.unctad.org/en/docs/itcdtsbmisc58rev2_en.pdf
UNCTAD (2001). "Generalized System of Preferences: Handbook on the Scheme of Canada"(UNCTAD/ITCD/TSB/Misc. 66) - Advance Copy Available athttp://www.unctad.org/en/docs/itcdtsbmisc66_en.pdf http://www.unctad.org/Templates/Page.asp?intItemID=1424&lang
UNCTAD (2002). "Generalized System of Preferences: Handbook on the Scheme of The EuropeanCommunity" (UNCTAD/ITCD/TSB/Misc. 25/Rev. 2)Available athttp://www.erca.gov.et/GSP-EU.pdf
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Other sources:
UNCTAD (2008). "Generalized System of Preferences:Handbook on the Scheme of the European Community" (UNCTAD/ITCD/TSB/Misc. 25/Rev. 3)Available athttp://www.unctad.org/en/docs/itcdtsbmisc25rev3_en.pdf http://www.unctad.org/templates/Page.asp?intItemID=1425&lang=1
http://investincanada.gc.ca/eng/advantage-canada/tax-advantage/tariffhttp://investincanada.gc.ca/eng/establish-a-business/faq.aspx?action=aThe Vietnam Trade Office and Sidley Austin LLP. "Frequently AskedQuestions - Understanding Vietnam and GSP. June 2008.Available athttp://www.us-asean.org/Vietnam/GSP/FAQ.pdf
www.regulations.govhttp://www.ustr.gov/trade-topics/trade-development/preference-prohttp://www.ecuadortimes.net/2011/02/11/atpdea-to-expire-tomorrow
http://investincanada.gc.ca/eng/advantage-canada/tax-advantage/tariff%E2%80%A6http://investincanada.gc.ca/eng/establish-a-business/faq.aspx?action=ahttp://www.regulations.gov/http://www.ustr.gov/trade-topics/trade-development/preference-pro%E2%80%A6http://www.ecuadortimes.net/2011/02/11/atpdea-to-expire-tomorrow%E2%80%A6http://www.ecuadortimes.net/2011/02/11/atpdea-to-expire-tomorrow%E2%80%A6http://www.ustr.gov/trade-topics/trade-development/preference-pro%E2%80%A6http://www.regulations.gov/http://investincanada.gc.ca/eng/establish-a-business/faq.aspx?action=ahttp://investincanada.gc.ca/eng/advantage-canada/tax-advantage/tariff%E2%80%A6