GSP Lapse Marks Its First Anniversary – Unanticipated Costs Mount for Emerging Economies and U.S. Importers

August 1, 2014, marked the one-year anniversary of the lapse in Congressional authorization of the Generalized System of Preferences (GSP). The 22-member Alliance of GSP Countries has expressed disappointment that Congress did not renew GSP prior to leaving Washington for its August recess.

The ongoing lapse in GSP impacts the livelihood of thousands of small and medium-sized businesses in the United States and in GSP-beneficiary countries. Since August 1, 2013, U.S. businesses have paid reinstated import duties for products from GSP-eligible countries, costing U.S. importers $631 million thus far, or approximately $1.9 million per day.

Exporters from GSP-eligible countries have felt the impacts as well. U.S. customers have canceled orders from hundreds of businesses in GSP countries and are reconsidering their commercial ties with GSP countries in favor of low-cost producers. The lack of GSP not only hurts the bottom line for businesses worldwide and in the United States, but also undermines the U.S. strategic goals of deepening economic ties and overall partnerships with developing economies.
The Alliance applauded the bipartisan efforts of the Senate and House of Representatives trade leadership when they introduced legislation in July 2013 to extend GSP. Now a year later, the continued absence of GSP illustrates the difficulty in finding a viable legislative path. The geographically and economically diverse group of Alliance countries strongly urges Congress to renew GSP when it returns from its August recess.

GSP provides duty-free treatment for up to 5,000 types of U.S. imports from 123 emerging economies. U.S. imports from GSP beneficiary countries benefit the livelihoods of more than 3.8 billion people living in two-thirds of the world’s economies. GSP also strengthens the U.S. economy by generating tens of thousands of jobs and providing U.S. manufacturers with needed inputs. Since the expiration, American importers have lost sales, stopped hiring, and delayed expansion plans.

Information on the Alliance and GSP is available at Media contacts: Romulo Cabeza, Sandler Trade LLC, at

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