The United State has been providing GSP facilities to developing countries since 1976. This GSP facility is renewed periodically. Currently, 122 developing countries enjoy this preferential GSP facility in accessing the US markets. Under the GSP scheme, selected products originating in developing countries are granted reduced or zero tariff rates. In order to be GSP eligible, products must originate from beneficiary developing countries or beneficiary least developed countries.
The US GSP Rules of Origin requires at least 35% value addition to confer GSP eligible product status. About 5,000 products from beneficiary countries gets GSP facility. The US GSP has two lists for GSP eligible products:
(1) GSP-Eligible products for Beneficiary Least Developed Countries
(2) GSP-Eligible products for Beneficiary Developing Countries
Manufactured items, and inputs, jewelry, electronics, some agricultural products, carpets, some textiles and apparels, chemicals, marble and minerals are eligible to get GSP facility. But most textiles and apparel, watches, stockings and socks, footwear, handbags, hats and headgear, luggage, gloves, trunks, suitcases, vanity and all other cases (Chapter 42) and leather goods are excluded from GSP by law.
After the Hong Kong Ministerial Declaration of 2004 that mandated the Developed Countries to offer Duty Free Quota Free (DFQF) access to the LDCs, the USA uses its GSP facility for LDCs as the USA DFQF to the LDCs. However, the DFQF market access provided by the USA is yet to fully comply with the WTO mandate.
The GSP facilities provided by the USA does not cover Bangladesh’s major export earnings sector, the ready-made garments (RMG). Other items such as tobacco, sports equipment, and furniture, ceramic and plastic goods enjoy GSP facility in accessing US market.
However, the USA had suspended preferential GSP access of Bangladesh goods into its market in June 2013 and till date it remains suspended.
For more details and updated information on US GSP issues, visit www.ustr.gov.