The GSP, also known as the Generalized System of Preferences, is a program designed to encourage monetary prosperity in developing countries throughout the world. This program provides preferential treatment to beneficiary countries, those which are underdeveloped, on over 3,500 products. The objective of GSP is to help poorer countries develop further economically by eliminating tariffs on specific exported goods. The hope is to give these struggling countries an opportunity to grow through trading with super powers such as the United States. Only certain products that are abundantly produced by the developing country are eligible for duty free treatment.
Some of the imported products covered by the GSP in the United States are live cattle and other purebred animals used for dairy purposes, poultry and meat, select fish, cheeses, spices, nuts, fruits, and agricultural products such as sugar and corn from countries throughout the world. In addition to the food covered by the GSP, other such items as chemicals, metals, turbines, engines, and mechanical parts are also acknowledged by the GSP. Some of the more popular items that the United States imports from foreign countries who are members of the GSP are textiles from Turkey, steel from India, and corn from Mexico. The list of countries and products from each country which are eligible for GSP can be found at https://ustr.gov.
In tune with American values, the GSP supports progress in third world countries by encouraging worker rights and labor laws. It furthermore helps American companies to grow as essential goods are being brought into the country in abundance and in an inexpensive manner.
For importers, the GSP offers immense advantages. Primarily, GSP has helped importers to ship certain products from impoverished countries to wealthy countries duty free. In other words, thanks to the GSP, importers in economically stable countries will save a lot of money on shipping specific goods from developing countries. In 2012 alone, the United States imported approximately $20 billion worth of products. The GSP allowed importers to avoid having to pay tariffs on selected imported goods from developing countries. Even better, while simultaneously saving millions of dollars for themselves, these importers are helping to develop the economy of financially struggling countries while also facilitating the growth of their own market back at home. Essentially the GSP is encouraging importers to bring selected goods into the country from respective poor countries to save money and help fiscal growth.
In July 31st, 2013, the GSP actually expired, but it was renewed by President Obama on June 25th of 2015. During this period of time when the GSP was not in effect, the United States alone spent over $1 billion dollars on tariffs for goods that would have been covered under the GSP. Thankfully, importers can go back and get refunded retroactively for the products that were typically covered by the GSP. The program was reinstated quite simply because of its advantages and benefits on numerous fronts such as developing the economy of impoverished countries via trade to wealthy countries and encouraging fair trade between countries with contrasting prosperity. Furthermore the GSP has helped aid the growth of businesses in our country while simultaneously saving money on tariffs that importers would have been responsible for if not for the GSP.
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