ASEAN Briefing, Nov. 25, 2020: US Extends GSP Status for Indonesia
Amid rising tension in the South China Sea, the US is seeking new ways
to cooperate with Indonesia in areas, such as maritime security in the
Indo-Pacific region. The country lies between one of the world’s busiest
trade routes. The Port of Singapore, for instance, is the region’s
largest and busiest and the second in the world behind Shanghai,
carrying approximately 37.2 million twenty-foot equivalent units (TEUs)
in 2019.
What is GSP?
The GSP allows for the duty-free export of goods from selected
countries to the US. The program was enacted through the Trade Act of
1974 to support the economic growth of developing countries. It is the
US’ most extensive trade preference program.
.
More than 100 countries
are GSP-eligible beneficiaries, and countries wanting to join the
program will have to fulfill several criteria, such as workers’ rights,
intellectual property rights, and the country’s level of economic
development.
Countries that have achieved a ‘sufficient’ level of development may
lose their GSP benefits. Turkey lost its GSP status in 2019, with the US
government citing the country’s improved level of development.
Another beneficiary to lose its GSP status in 2019 was India due to
the country not providing assurances to the US that it will provide
equitable access to its large market. The US revoked one-third of
Thailand’s GSP eligibility because of ongoing concerns for worker
rights.
In full: https://www.aseanbriefing.com/news/us-extends-gsp-status-for-indonesia/
.
USTR, Generalized System of Preferences (GSP)
U.S. trade preference programs such as the Generalized System of
Preferences (GSP) provide opportunities for many of the world’s poorest
countries to use trade to grow their economies and climb out of
poverty. GSP is the largest and oldest U.S. trade preference program.
Established by the Trade Act of 1974, GSP promotes economic development
by eliminating duties on thousands of products when imported from one of
119 designated beneficiary countries and territories. The GSP Guidebook provides basic information on the program.
GSP promotes economic growth and development in the developing world.
GSP promotes sustainable development in beneficiary countries
by helping these countries to increase and diversify their trade with
the United States. The GSP program provides additional benefits for
products from least developed countries. The list of products eligible
for duty-free treatment when imported from GSP beneficiaries can be
found here.
.
GSP supports U.S. jobs and helps keep American companies competitive.
Moving GSP imports from the docks to U.S. consumers, farmers, and
manufacturers supports tens of thousands of jobs in the United States.
GSP also boosts American competitiveness by reducing costs of imported
inputs used by U.S. companies to manufacture goods in the United
States. GSP is especially important to U.S. small businesses, many of
which rely on the programs’ duty savings to stay competitive.
GSP promotes American values.
In addition to promoting economic opportunity in developing countries,
the GSP program also supports progress by beneficiary countries in
affording worker rights to their people, in enforcing intellectual
property rights, and in supporting the rule of law. As part of the GSP Annual Review, USTR conducts in-depth reviews of beneficiary countries’ practices in response to petitions from interested parties.
In full: https://ustr.gov/issue-areas/trade-development/preference-programs/generalized-system-preference-gsp
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Achmad Ismail (2019), Indonesia and United States General System of Preference (US-GSP): Eligibility of Indonesia as a Beneficiary Country
After 3 years, precisely in 2018, the United States reviewed Indonesia's
eligibility in receiving US-General System of Preference (US-GSP)
facilities. Interestingly, the results of the review have not yet been
published. This happens for the United States assumes that Indonesia
implements various trade and investment barriers that have a negative
impact on the United States, one of which is due to the policy of
limiting imports of horticultural products, the implementation of
Gerbang Pembayaran Nasional (GPN) and so on. Then with the current
conditions, how about the eligibility of Indonesia if it want to receive
GSP facilities. This article argues that Indonesia continues to fulfil
the required points as a beneficiary country. Indonesia can also use
these points as a source of bargaining power to influence the United
States so that the results of the GSP review state that Indonesia is
eligible to receive GSP facilities, as well as refuse previous US
assumptions. This article uses qualitative research methods with a case
study approach with primary (interview) and secondary (literature) data
collection techniques. This article concludes that Indonesia is still
eligible to receive the GSP facility because Indonesia is trying to
fulfil the required points as a source of Indonesia's bargaining power
towards the United States.
.
US extends GSP status
for Indonesia
Dian Septiari
The Jakarta Post
Jakarta / Sun, November 1, 2020 / 12:50 pm
This handout photograph taken and released on Oct. 29, 2020 by the
Indonesian Foreign Ministry shows US Secretary of State Michael Pompeo
(left) posing with Indonesian Foreign Minister Retno Marsudi during
their meeting in Jakarta. (AFP/Indonesian Foreign Ministry )
Shares
Foreign Minister Retno LP Marsudi announced on Sunday that Indonesia has
retained its status as a beneficiary of the United States’ Generalized
System of Preferences (GSP) following the recent visit of United States
Secretary of State Mike Pompeo to Jakarta.
Retno said the extension of the GSP facility for Indonesian exports to
the US, the decision of which was made official on Friday by the US
Trade Representative (USTR), was a concrete form of strategic
partnership between the two countries.
Indonesia is one of 120 countries that has benefited from the GSP, the
oldest and largest US trade preference program. It eliminates duties on
thousands of products to promote economic development among beneficiary
countries and territories.
The facilities have been given to developing countries in the world
since 1974. Indonesia first received GSP benefits from the US in 1980.
Read also: Jokowi meets with Pompeo, seeks to secure GSP extension for
Indonesia
“This decision [to extend the GSP facility for Indonesia] was made after
the USTR reviewed it for approximately 2.5 years since March 2018,”
Retno said.
In 2018, US President Donald Trump said his administration would review
the GSP benefits provided to several developing countries, including
Indonesia, with which the US has a trade deficit. Jakarta has since
tried to lobby the US in the hopes of retaining its trade privileges.
India and Thailand both saw a loss of trade privileges with the US in
October last year.
"During the visit of Secretary of State [Mike Pompeo] to Indonesia three
days ago, we also discussed this issue in a bilateral meeting with me
and a courtesy visit to the President [Joko "Jokowi" Widodo]," Retno
said.
Read also: RI pledges neutrality during Pompeo visit
She said the extension would bring positive benefits not only to
Indonesia but also to US businesses.
“We hope that strong trade relations between Indonesia and the US will
be a catalyst for increased investment between the two countries,” she
added.
She touted the US as Indonesia's second-largest non-oil and gas export
destination country after China, with total two-way trade value reaching
US$27 billion in 2019.
“Going forward, the two countries agreed to seek a more comprehensive
and permanent discussion of the Indonesia-US trade partnership.”
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