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10-28-2010 - GSP Set to Expire December 31, 2010

The Generalized System of Preferences (GSP) program is scheduled to expire on December 31, 2010, unless legislation passes that includes extending the program. GSP dates to the early 1970’s and is perceived to entice trade with developing countries as many products imported from eligible countries are exempt of duty. Extension of GSP is historically granted each year with a few exceptions as multiyear extensions have been enacted.

The House Ways and Means and Senate Finance Committees continue to discuss extending GSP. Consensus within the industry is that an extension granted prior to December 31, 2010 will, in all likelihood, not contain substantial modifications to the current program.  There also appears to be discussion of a potential multiyear extension.

Historical lapses in GSP have typically been short term and nearly always include a provision that makes their renewal retroactive to the date of expiration. While duty payments will be required throughout a lapse in the program they have historically been refunded as a result of the retroactive provision.

One potential roadblock to an extension is the contentious issue of sleeping bags from Bangladesh, which are currently eligible for GSP claims. Senator Sessions (R-Alabama) introduced a bill (S. 3823) that would effectively remove sleeping bags classified in HTS 9404.30.80 from GSP eligibility. This bill is currently under review within the Committee on Finance and it is not yet know what impact, if any, it may have on GSP extension.

Geo. S. Bush & Co., Inc. will closely monitor developments and, in the event of a lapse in GSP coverage, we will continue to flag eligible imports when submitting entries. This will afford the importer an expeditious refund should legislation pass after expiration, which includes a retroactive provision.

Please do not hesitate to contact your GSB representative in the event additional information is required. You may reach us at: (503) 228-6501 or via email: info@geosbush.com.