Industry Letter Calls for Duty-Free Benefits for Travel Goods From All GSP Countries
More than 100 industry organizations, ranging from broker associations to textile manufacturers, directly appealed to President Barack Obama to reconsider his decision to defer approval of duty benefits for 27 travel goods imported from many countries under the Generalized System of Preferences (here). In a letter signed by groups including the Express Association of America, the U.S. Fashion Industry Association and the Pacific Coast Council of Customs Brokers and Freight Forwarders, companies and industry associations called on Obama to decide to apply duty-free approvals for the goods “definitely no later” than Oct. 1, to boost development before GSP expires at the end of 2017. “Deferring a decision to make eligible all GSP countries for travel goods, which include backpacks, purses, suitcases, and laptop cases, creates business uncertainty and delays the investment that will create and support jobs in developing countries as well as jobs here at home," the letter said.
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The Obama administration’s June 30 proclamation (here) conferred duty-free benefits for 27 travel goods imported from least developed GSP beneficiaries and African Growth and Opportunity Act (AGOA) countries, but withheld benefits for non-least developed beneficiaries subject to GSP, omitting travel goods from the Philippines, Indonesia, Thailand, India, Sri Lanka and Pakistan (see 1607010008). The industry coalition’s letter follows a bipartisan call from a group of 14 House lawmakers urging the Obama administration to proclaim duty-free benefits for the 27 travel goods for all GSP beneficiary countries (see 1607280024). Extending eligibility to all GSP beneficiaries would enhance benefits for developing countries without undermining Obama’s least developed beneficiary and AGOA travel goods designations, and could help those countries compete with China. Deferring the decision exacerbates business uncertainty, and delays new investment and job creation in all GSP-eligible countries, says the letter, which also calls the administration’s policy rationale behind the deferments “unclear.”
Limiting benefits to least developed GSP countries and AGOA countries will cap overall impacts on development, because most of those countries won’t have the ability to make “more complicated” travel products “for years,” the groups said. Moreover, deferring the benefits, whose expected duty savings range from 4.5 percent to 20 percent per good, could entice some companies to move production from GSP-eligible countries to China, which produces 85 percent of the world’s travel goods, the letter says. “Deferred action on the remaining GSP countries, many of which are U.S. allies, negates any future development opportunities for GSP countries and undermines the unanimous stakeholder and bipartisan support for expanding GSP to travel goods to diversity development and sourcing options,” the groups said. Enabling duty-free benefits for travel goods imported from all GSP-eligible nations would allow those countries to specialize in certain areas of textile manufacturing, translating to a net benefit for all those countries, which would be better able to compete with China, the letter says. The White House didn’t comment.