*EPF313 09/10/2003
Fact Sheet: Duty-Free Program Aids Poor Countries' Development, USTR Says
(U.S. imports under GSP totaled $17.7 billion in 2002) (580)

The U.S. Generalized System of Preferences (GSP) program, which grants duty-free treatment to certain imports from developing countries, encourages trade and broad-based economic development, says the Office of the U.S. Trade Representative (USTR) in a September 9 fact sheet. The fact sheet was issued on the eve of World Trade Organization (WTO) negotiations September 10-14 in Cancun, Mexico.

Following is the text of the fact sheet:

(begin fact sheet)

Office of the United States Trade Representative, HYPERLINK "http://www.ustr.gov"
September 9, 2003

Generalized System of Preferences

Promoting Economic Growth in Developing Countries, Strengthening America's Global Economic Partnerships

U.S. GSP Coverage is Broad, Allows Increased Market Access for Developing Countries

The U.S. Generalized System of Preferences (GSP) program grants duty-free treatment to specified products imported from more than 140 designated developing countries and territories. The program began in 1976, when the United States joined 19 other industrialized countries in granting tariff preferences to promote the economic growth of developing countries through trade expansion. The Trade Act of 2002, which most recently reauthorized the U.S. GSP program, extended the program through calendar year 2006.

-- Currently, approximately 5,500 products or product categories (defined at the eight-digit level in the Harmonized Tariff Schedule of the United States) are eligible for duty-free entry from some or all GSP beneficiary countries.

-- Of this total figure, approximately 1,800 product categories receive duty-free treatment only when imported from least-developed-beneficiary developing countries and African Growth and Opportunity Act (AGOA) beneficiary countries.

-- In 2002, total duty-free imports under GSP were $17.7 billion.

Expanded GSP Coverage in 2003

-- On July 1, following an annual review of the GSP program, President Bush issued a proclamation expanding the program's product coverage.

-- The President's proclamation extended GSP import benefits to approximately $900 million through the addition of new products, restoration of previously lost benefits, and the continuation of benefits that would otherwise expire.

GSP Program Greatly Benefits Developing Countries

-- The GSP program is based on the principle that the creation of trade opportunities for developing countries is an effective, cost-efficient way of encouraging broad-based economic development, and a key means of sustaining the momentum behind economic reform and liberalization.

-- The U.S. GSP program is designed to integrate developing countries into the international trading system in a manner commensurate with their development. The program achieves these ends by making it easier for imports from developing economies to compete in the U.S. market with imports from the industrialized nations.

Further, the GSP program encourages beneficiaries to:

-- Eliminate or reduce significant trade barriers to goods, services, and investment

-- Afford all workers internationally recognized worker rights

-- Establish tough laws governing child labor

-- Promote the fight against international terrorism

-- Provide adequate and effective protection of intellectual property rights

Key Part of U.S. Global Economic Partnership

-- Trade preference programs like GSP are an important part of America's global economic partnership, as such unilateral programs should lead over time to more open, extensive markets for all countries, developed and developing.

-- The ongoing global trade negotiations in the World Trade Organization's Doha Development Agenda offer an opportunity to permanently tear down tariff and other barriers to global trade, and spur the kind of full economic integration that will be a catalyst for sustained global growth and development.

(end fact sheet)

(Distributed by the Bureau of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)

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