List of 156 Country/Tariff Number Pairs that May Lose/Gain GSP on July 1 Due to CNLs

The Office of the U.S. Trade Representative is seeking comments by April 6, 2012 on the country/tariff number pairs that could lose their Generalized System of Preferences duty-free treatment in the 2011 Annual Review if they exceed certain statutory thresholds or one or both Competitive Needs Limits (CNLs). Comments are also sought on the possible re-designation of articles currently ineligible for GSP. While 2011 full calendar data is available for all GSP-eligible tariff numbers, USTR has issued four lists that indicate the GSP changes for 156 tariff numbers that may take effect on July 1, 2012.

(See ITT's Online Archives 12031602 for summary announcing the availability of these lists. USTR notes that the four lists are computer-generated and are for informational purposes only. They may not include all pairs to which the GSP CNLs may apply. All determinations and decisions regarding the CNLs of the GSP program will be based on 2011 full calendar year import data with respect to each pair. As a result, interested parties should conduct their own data review for pairs of concern.)

4 Pairs Could Lose GSP Due to "Five Year" CNL Rules

List IV contains the pairs affected by 2006 GSP program amendments that allow the President to revoke a CNL waiver that has been in effect for at least five years, if certain thresholds are met. Such revocation would lead to loss of GSP benefits. Comments regarding these potential revocations are invited.

(Note that these Colombia carnations and Thailand silver jewelry pairs were on USTR's prior list for 2009.)

13 Pairs Slated to Lose GSP, but CNL Waiver Petition Accepted for 9

List I shows those pairs that have already exceeded one or both of the CNLs (value and/or 50%). According to List I, the following 13 pairs are slated to lose GSP duty-free treatment on July 1, 2012 (however, a CNL waiver petition was accepted for 9 of the 13 pairs, which if granted by the President, will allow the pair to retain its free GSP rate).

Four slated to lose GSP. Petitions for such waivers must have been filed before the CNLs were exceeded. No further action is possible. As s result, the four pairs that are not bolded below, (1) ethyl alcohol from Brazil, (2) flavorings from Indonesia, (3) upholstery leather from Brazil, and (4) aluminum from Venezuela, are expected to lose their GSP duty-free treatment on July 1, 2012.

Nine have waiver request pending. The other nine pairs (bold) are also expected to lose their GSP duty-free treatment unless the President grants the pair's waiver petition.

103 Pairs Slated to Lose GSP, But All are Eligible for ‘De Minimis' CNL Waiver

List II covers the 103 pairs which are currently GSP eligible but exceed the 50% CNL and are therefore slated to lose GSP unless they receive a de minimis CNL waiver.

The President may waive the 50% CNL for a particular pair 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 ($20.5 million for 2011).

De minimis waivers are considered automatically by the President, without the need for a petition. Comments regarding any possible de minimis waivers are invited.

36 Pairs May Regain GSP Benefits if Re-Designated

List III contains 36 pairs currently without GSP benefits that are eligible for possible re-designation by the President based on 2011 trade data (i.e., imports in 2011 did not exceed the CNLs) and consideration of certain statutory guidelines, such as (1) the country's general level of development; (2) its competitiveness in regard to the particular product; (3) the country's practices relating to trade, investment, and worker's rights; (4) the overall economic interests of the U.S., including the effect continued GSP treatment would have on the relevant U.S. producers, workers, and consumers; and (5) any other relevant information. Comments regarding these possible re-designations are invited.

Comments are due by 5:00 p.m. on April 6, 2012

USTR contact- Tameka Cooper (202) 395-6971

USTR's four lists for the pairs that are in the (1)-(4) groupings above, containing additional information, available here.

Full 2011 calendar year data for individual tariff numbers may also be viewed at the ITC's DataWeb here.

BP Note

According to the notice and USTR sources previously contacted, a GSP beneficiary developing country that is subject to the CNLs test will lose GSP duty-free treatment for an eligible tariff number if exports of that tariff number from the country to the U.S. during a calendar year meet either of the following two CNLs (and no waivers are granted):

1. exports of the tariff number have a value in excess of the applicable amount for that year ($150 million for 2011) (the “value CNL”), or

2. exports of the tariff number have a value equal to or greater than 50% of the value of total U.S. imports of that tariff number from all countries (the “50 percent CNL”).

(Pursuant to 19 USC 2463(c)(2)(D), these CNLs do not apply to least-developed beneficiary developing GSP countries (LDBDCs) or beneficiary AGOA GSP countries.)

In addition, the “Tax Relief and Health Care Act of 2006” tightened the GSP CNL waiver criteria by allowing the President to revoke a CNL waiver that has been in effect for at least five years for a GSP-eligible product from a specific country, if its annual trade level in the previous calendar year exceeds 150% of the annual monetary threshold ($225 million in 2011) or comprises 75% of all U.S. imports of that product. (See ITT’s Online Archives 06122005, for summary.)