Claim more US GSP benefits, says US Trade Office

The US GSP (Generalised System of Preferences) is a trade concession scheme that allows around 3,400 items to be exported into the US duty free, from developing and least developed countries. The scheme is open to 131 countries including Sri Lanka.
However, to qualify for US GSP benefits exports must show 35% domestic value addition and ‘substantial transformation.’

The US Trade Representative Office says Sri Lankan exporters should maximise on the US GSP scheme to increase exports into the US. Currently, some exports still pay duties although they are duty free under the GSP.

“A portion of exports into the US, that is eligible for GSP, did not claim GSP benefits. They paid duties for products that were eligible for GSP benefits,” said Ms Meredith Broadbent, from the US Trade Representative Office, at a video conference organised by the Ceylon Chamber of Commerce, at the Distance Learning Centre on Monday.

This year, up to end August, Sri Lankan exporters could have saved US$ 480,000 in duties on US$ 12 million worth of GSP eligible exports.

“In 2007, from January to August, US$ 111.7 million worth of GSP eligible products were imported to the US from Sri Lanka. 89% of these imports entered duty free but that still leaves another 11% that are eligible. An additional US$ 12 million in GSP eligible goods could have received duty free treatment. Sri Lankan businesses and US importers could have saved US$ 480,000 in duties,” said Broadbent.

Therefore, Sri Lankan exporters are told to inform their US importing partners to ask for GSP duty cuts wherever possible, as GSP treatment is not automatic and must be claimed.

Most manufactured items, inputs used in manufacturing, jewellery, types of carpets, specified agricultural and fisheries products, types of chemicals, marble and minerals can use the GSP scheme to enter the US duty free.

Most textile and apparel products are not eligible for GSP. However, some textile and apparel products are listed under the GSP scheme but even these limited GSP benefits are not fully utilised. For instance, this year, Sri Lanka exported US$ 4.8 million worth of items coming under apparel and textile but 33% did not claim GSP duty cuts. US trade officials say Sri Lankan exporters should identify products that gain a large duty advantage under the US GSP and increase exports of these goods. Exporters are also advised to use regional benefits. The US recognises the SAARC region as one country under the GSP. This allows SAARC regional inputs to be counted as domestic inputs.Sri Lanka has also requested duty free access for cotton handloom items and is waiting for a response from the US.