2011 brings ambiguity and anxiety for foreign producers and US importers who rely on the Generalized System of Preferences (GSP) to reduce tariffs on imported goods from eligible developing countries. At this juncture, there is no GSP program.

Authority for the GSP program expired on December 31, 2010, because Senator Jeff Sessions, (R.-Ala.), refused to support an extension until sleeping bags from Bangladesh were removed from program eligibility. A last ditch attempt was made to prevent expiration in late December but fell short. On December 29, 2010, the Andean Trade Preference Act was extended (except for Peru which now has separate trade agreement with the United States), but the GSP was not extended.

It is not known at this point whether or when the new Congress will extend GSP, but many Members of Congress have voiced strong support for the GSP program. The Obama administration supports congressional action to extend the GSP program and is working with Congress toward this end.

The last time authorization of the GSP program lapsed was in 2001. Congress subsequently reauthorized the program 10 months later. Prior to 2001, the program expired multiple times with lapses that varied between one and 15 months. Each renewal during this period was made retroactive to the expiration of the program. But at this point, it is not known if any future reauthorization of GSP will be made retroactive. If GSP is renewed, we will be watching for changes in the program – there has been much talk of reforming the program and further limiting the number of countries who may participate.

For further information, please contact the Arent Fox attorney with whom you work or a member of Arent Fox’s International Trade Practice Group.