GSP going away January 1, 2011

Editor’s Note: Today’s post is from Dick Locke, Sourcing Innovation’s resident expert on International Sourcing and Procurement. (His previous contributions are still archived.)

The U.S. Congress recessed without passing the legislation required to
continue the GSP program beyond January 1, 2011.

You do know what the GSP program is, don’t you? If not, you might
consider acquiring some training. It’s a program called the Generalized System of Preferences (guide) under which imports from about 135 developing countries have been given duty free treatment by the US. Due to congressional
inaction, US importers will now be facing higher duties on many goods. Goods
that were now eligible for duty free treatment will jump to the level
that would be paid for goods from developed countries starting January
1st. Among the 135 countries, the most notable are India, Thailand,
Turkey, Indonesia and the Philippines. There is probably a lot of
material already in the pipeline.

This is the third time within my memory that this has happened. The last
two times, Congress passed enabling legislation quickly after returning
from recess. The made the legislation retroactive so people who paid
high duties got them refunded. However, the next Congress is a bit
unpredictable, with a lot of new members who are likely to be
anti-import. Stay tuned.

Dick Locke, Global Procurement Group.