The United States Trade Representative published a notice about the availability of full 2006 import statistics relating to competitive need limitations (CNLs) under the Generalized System of Preferences (GSP) program. These statistics provide insight into specific products that may be removed from, or reinstated to, GSP eligibility later this year.
As you know, the GSP program provides for the duty-free importation of designated articles when imported from designated beneficiary developing countries (BDCs). The Trade Act of 1974 sets out the two competitive need limitations (CNLs). 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 ($125 million for 2006), 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 by no later than July 1 of the next calendar year.
Under the 1974 Act, 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 ($18 million for 2006).
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.
A CNL waiver remains in effect until the president determines that it is no longer warranted due to changed circumstances. However, the Tax Relief and Health Care Act of 2006 provides that, not later than July 1 of each year, the president should revoke any CNL waiver that has been in effect with respect to an article for five years or more if the BDC has exported to the U.S. during the preceding calendar year a quantity of the article that (a) has an appraised value in excess of a specified amount ($187.5 million in 2006) or (b) exceeds 75 percent of the appraised value of the total imports of that article into the U.S. during that calendar year.
Exclusions from GSP duty-free treatment where CNLs have been exceeded will be effective July 1, 2007, unless previously granted a waiver by the President. CNL exclusions, as well as decisions with respect to de minimis waivers and redesignations, will be based on full 2006 calendar year import statistics.
USTR has released the following lists of statistics:
• List I includes (a) articles that became ineligible for GSP treatment on or before July 1, 2006, and (b) GSP-eligible articles that have already exceeded the CNLs by their import levels amounting to more than $125 million or more than 50 percent of the total U.S. import value in 2006.
• List II includes GSP-eligible articles that have exceeded the 50 percent CNL but are eligible for a de minimis waiver.
• List III includes GSP-eligible articles that are currently not receiving GSP duty-free treatment but may be considered for re-designation based on 2006 trade data and consideration of certain statutory factors.
• List IV includes articles subject to the new CNL waiver thresholds under the Tax Relief and Health Care Act of 2006.
USTR is seeking comments by March 16 regarding possible de minimis waivers and re-designations for the products in lists II and III, respectively. Additionally, USTR is seeking comments by March 23 regarding the potential revocation of existing CNL waivers for the products in list IV, which would remove these products from GSP eligibility.The products appearing on the attached lists may be of interest to AFI members. Comments may be submitted to FR0441@USTR.GOV regarding submissions to the 2006 GSP Redesignation and De minimis Waiver Review. For the 2006 CNL Waiver Threshold Review, submit comments to FR0618@USTR.EOP.GOV.
