U.S Embassy in Cambodia: USTR to Assess GSP Eligibility of Beneficiary Countries
The Generalized System of Preferences (GSP) is a U.S. trade program designed to promote economic growth in the developing world by providing preferential duty-free entry for up to 5,000 products to designated states and territories. GSP is not a trade agreement, but rather a benefit offered to less economically developed countries, allowing these countries to increase and diversify their trade with the United States.
The U.S. Trade Representative (USTR) has announced a new effort to
ensure beneficiary countries are meeting the eligibility criteria of
GSP. The process will involve an assessment by USTR and other relevant
agencies of each GSP beneficiary country’s compliance with the statutory
eligibility criteria. If the assessment raises concerns regarding
compliance, the Administration may initiate a full country review of
that country’s continued eligibility for GSP. During the assessment,
there will be ample opportunities for engagement between the government
of the beneficiary country and the U.S. Government. Cambodia became a
GSP beneficiary in 1997 and in 2016 exported nearly $179 million duty
free to the United States under the program.
To qualify for GSP benefits, a beneficiary country must meet the eligibility criteria established by Congress, including, but not limited to: enforcing arbitral awards; a beneficiary may not have nationalized, expropriated or otherwise seized property of U.S. citizens or corporations without providing, or taking steps to provide effective compensation; taking steps to afford internationally recognized worker rights; implementing commitments to eliminate the worst forms of child labor; and the extent to which a country provides adequate and effective protection of intellectual property rights (...)
In full: https://kh.usembassy.gov/ustr-assess-gsp-eligibility-beneficiary-countries/
CDC:Generalized System of Preferences (GSP)
Cambodia is one of the beneficiaries of the Generalized System of Preferences (GSP) schemes operated by developed countries. Under these schemes, import tariffs on many products from the beneficiaries are exempted or reduced if requirements such as rules of origin are fulfilled. Below Table shows the relations between the beneficiaries in Asia and three major markets: Japan, the US and the EU.
Since Cambodia is categorized as a least developed country (LDC), it is entitled to additional preferences, under which more of its products are subject to duty-free or tariff reductions. For example, Japan gives Cambodia tariff preferences on imports of 3,490 articles plus an additional 2,200 articles including apparel and footwear as shown in below Table. (...)
European Commission: Cambodia loses duty-free access to the EU market over human rights concerns
The “Everything But Arms” (EBA) arrangement is part of the EU's Generalised Scheme of Preferences (GSP). The GSP allows vulnerable developing countries to benefit from lower duties of duty-free exports to the EU, and hence stimulate their economic growth. It is a one-way arrangement: it does not require reciprocity vis-a-vis EU exports. Through the EBA arrangement, the EU grants duty-free and quota-free access to its market for all products – except arms and ammunition – from Least Developed Countries (as defined by the United Nations). Under the GSP Regulation, tariff preferences may be suspended in the case of "serious and systematic violation of principles" laid down in the international human rights and labour rights conventions listed in an annex to the GSP Regulation.
Based on serious concerns about the deterioration of political, human, land and labour rights in Cambodia, in February 2019, the Commission opened a procedure for a withdrawal of the EBA preferences granted to Cambodia. On 12 November 2019, the Commission submitted to Cambodia a report demonstrating serious and systematic violations of key principles of the International Covenant on Civil and Political Rights (ICCPR) linked to political participation, freedom of expression and freedom of association in Cambodia. At the same time, despite remaining serious concerns, the report underlined tangible progress in solving land disputes in the sugar sector and with respect to labour rights. Following a period for comments, on 12 February 2020, the Commission adopted a Delegated Regulation on a temporary and partial withdrawal of tariff preferences granted to Cambodia under the EBA. The Regulation entered into force on 25 April 2020 and takes effect as of 12 August 2020.
The GSP Program
- It must be included as a GSP-eligible article (designated as A, A+ or A* in the Harmonized Tariff System of the United States).
- It must be imported into the United States directly from Cambodia, or pass through another country in a sealed container.
- Cambodia must be eligible for GSP treatment for that article.
- The article must be the growth, product, or manufacture of Cambodia.
- When inputs for a product are imported from elsewhere, the sum of the cost or value of materials produced in Cambodia plus the direct costs of processing must equal at least 35 percent of the product’s appraised value when the product is sold for export into the United States. Imported materials can be counted toward the 35 percent value-added requirement only if they are “substantially transformed” into new and different constituent materials which are then used to produce or manufacture the eligible article to be exported. “Substantially transformed” means that U.S. customs would classify the constituent materials as different items.
- The exporter/importer must request duty-free treatment under GSP by placing an “A,” “A+,” or “A* before the U.S. tariff line (HTSUS) number that identifies the imported article on form 7501.
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