The benefit of the U.S. Generalized System of Preferences (GSP) in Fair Trade

30 Mar

Fair Trade is once again fighting a battle to sell goods at an affordable rate in the United States, using a program that is important particularly for products like ours that do not compete with US manufactured goods.

According to the Office of the United States Trade Representative from the Executive Office of the President, the Trade Act of 1974 instituted the U.S. Generalized System of Preferences (GSP) on January 1, 1976.

What is GSP? The Office of the United States Trade Representative describes the program as:

“The U.S. Generalized System of Preferences (GSP) is a program designed to promote economic growth in the developing world by providing preferential duty-free entry for up to 4,800 products from 129 designated beneficiary countries and territories.”

GSP is important because it provides duty-free entry of products from developing nations — like some of the Fair Trade items Hope for Women offers — to better compete with items that are made in other countries using unfavorable labor practices.  GSP has enjoyed bipartisan support because trade to developing countries is more beneficial than aid.

GSP recently expired on December 24, 2010. The of the United States Trade Representative also addresses what has occurred (or at the time—would occur) post expiration date in December 2010 found in their FAQ:

“As a result, imports of GSP products from GSP beneficiary countries arriving in the United States on or after January 1, 2011, will be subject to regular,  Normal Trade Relations duties.”

It is almost April 2011 and the program has not been renewed. This is a cause of major concern for us here at Hope For Women and other small companies with a socially responsible, Fair Trade mission. GSP allowed us to bring these products to U.S. consumers at affordable prices and our future looks challenging if we don’t receive the GSP assistance.

It is important to note that there is a system in place for US companies to have their concerns heard if they feel that GSP is negatively impacting their business by providing an unfair subsidy, so that their dispute can be mitigated to benefit their business if their claim is deemed true. GSP is not about hurting US businesses, but is about providing better opportunities to alleviate poverty through trade, rather than aid programs.

Please help Fair Trade win to renew and reinstate GSP into law again.  If you’re a company you can add your name here to the Coalition for GSP.

Please Tweet & show your support with @HopeForWomen or @RenewGSPToday

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