Trade Preference Programs

Position

Trade preference programs are important development tools. Reducing tariffs and establishing dependable sourcing options are also important for successful retail supply chains. RILA is committed to promoting flexible, meaningful, predictable and simple-to-use preference programs that will assist development in the world’s poorest countries while offering American families the opportunity to purchase a variety of high-quality products at affordable prices.

Recent Activity

The GSP and Andean programs were renewed earlier this year, in tandem with the FTAs with Colombia, Panama, and Korea. GSP and Andean preferences were renewed retroactively back to their expiration dates and are authorized through July 31, 2013.

Action Needed

RILA continues to work with Congress to support trade preference programs to benefit the United States’ poorest trading partners, as well as U.S. businesses and families that rely on competitively priced imports. RILA encourages member companies to let their members of Congress know the importance of long-term authorizations of preference programs so as to provide stability and predictability.

Background

Trade preference programs help developing countries create jobs and economic opportunity to lift people out of poverty. Retailers also rely on these programs to provide lower-cost goods for American families. Programs, such as the Generalized System of Preferences (GSP) and Andean preferences, were renewed in 2011.

Generalized System of Preferences Program – The GSP program was renewed through July 31, 2013 as part of a package with the renewal of Trade Adjustment Assistance (TAA), both of which were passed in tandem with the US-Korea, US-Panama, and US-Colombia free trade agreements. GSP renewal went into effect on November 5, 2011, and was retroactive back to the beginning of the year.
Andean Trade Preferences Act – ATPA benefits for Colombia and Ecuador were renewed through July 31, 2013 as part of the implementing bill for the US-Colombia FTA. The renewal went into effect on November 5, 2011, and was retroactive back to the program’s expiration in February 2011. Bolivia’s benefits lapsed on June 30, 2009 after President Obama declined to renew them due to the country’s lack of cooperation with U.S. antinarcotics efforts. ATPA benefits for Peru expired on February 12, 2011, and were not renewed because the U.S.—Peru FTA has been implemented. It is possible that Ecuador could lose its benefits in the future as policymakers have cited concerns about Ecuador’s actions regarding investor protections and antinarcotics efforts.
Caribbean Basin Trade Partnership Act – CBTPA provides trade preference benefits to 19 Caribbean nations. Haiti is the primary beneficiary, and the program is scheduled to expire on September 30, 2020.
Haiti HELP Act – The Haiti HELP Act extended both the CBTPA and HOPE programs until September 2020, extended the HOPE value-add rule of origin until 2018 and lowered the content requirements, expanded both the knit and woven tariff preference levels (TPLs) to 200 million square meter equivalents (SMEs) each (with a few exclusions and sublimits in certain categories), and expanded the number of products eligible for a substantial transformation rule of origin.
African Growth and Opportunity Act (AGOA) – AGOA was signed into law in May 2000 to assist the economies of sub-Saharan Africa and to improve economic relations between the United States and the region. AGOA is authorized until 2015, but the special apparel provision, which permits lesser-developed countries to use third-country fabric for their apparel exports, is scheduled to expire in September 2012.

State Affairs

Contact

For more information, please contact Stephanie Lester, vice president of international trade, at stephanie.lester@rila.org.