The Office of the United States Trade Representative announced today that President Donald J. Trump is suspending $1.3 billion in trade preferences for Thailand under the Generalized System of Preferences (GSP) based on its failure to adequately provide internationally-recognized worker rights. In addition, the President is restoring some GSP benefits for Ukraine following its passage of legislation aimed at addressing shortcomings in its intellectual property (IP) regime.
USTR also announced it is opening new GSP eligibility reviews for two countries: South Africa, based on IP protection and enforcement concerns, and Azerbaijan, based on worker rights concerns. USTR also is closing GSP eligibility reviews with no loss of GSP eligibility for three countries: Bolivia and Iraq, based on improvements in the protection of worker rights in those countries, and Uzbekistan, based on improvements in its protection and enforcement of IP rights.
USTR also announced the results of the annual GSP product review. Decisions on product petitions can be viewed here.
Today’s announcement represents the culmination of three separate processes under the GSP program: (a) determinations on ongoing GSP eligibility reviews, and (b) regular assessments of beneficiary developing countries, combined with public comment opportunities, to determine whether to launch new GSP eligibility reviews, and (c) the annual GSP product review.
Outcomes of Ongoing Country Eligibility Reviews
Thailand: Despite six years of engagement, Thailand has yet to take steps to provide internationally recognized worker rights in a number of important areas identified in a 2015 petition from the American Federation of Labor and Congress of Industrial Organizations (AFL-CIO), such as providing protections for freedom of association and collective bargaining. GSP eligibility will be revoked effective six months from today for approximately one-third of Thailand’s GSP trade, which totaled $4.4 billion in 2018. The list of products to be excluded from GSP for Thailand is focused on products for which the United States is a relatively important market for Thailand, but where Thailand accounts for a relatively small share of U.S. imports. Additionally, due to longstanding worker rights issues in the seafood and shipping industries, GSP eligibility will be revoked for all seafood products from Thailand. A full list of the products to be excluded from GSP for Thailand is available here. The GSP market access eligibility review of Thailand will remain open.
Ukraine: In 2012, USTR opened a GSP review of Ukraine in response to a petition from the International Intellectual Property Alliance. In December 2017, the Trump Administration announced the partial suspension of Ukraine’s GSP benefits for failure to provide adequate and effective protection of IP rights. The announcement specifically referenced the importance of improving Ukraine’s system for collective management organizations (CMOs), which are responsible for collecting and distributing royalties to right holders. In 2018, Ukraine passed new legislation aimed at improving the governance of CMOs. Despite shortcomings with this legislation, it provides a framework to address concerns covered by the GSP review. In recognition of this important step, the United States is restoring approximately one-third ($12 million estimated trade value) of the $36 million (estimated trade value) GSP benefits originally removed for Ukraine, given continued significant concerns with Ukraine’s protection and enforcement of IP rights. A full list of the products to be restored to GSP eligibility for Ukraine is available here.
Bolivia: USTR is closing the GSP worker rights eligibility review of Bolivia following Bolivia’s passage of legislation raising the minimum age of work to 14, in line with international standards. The Trump Administration self-initiated this review in 2017, after passage of an earlier law lowering the national minimum working age below the internationally-recognized standard.
Iraq: USTR is closing a GSP worker rights eligibility review of Iraq opened in 2012 following Iraq’s passage of legislation that expands collective bargaining rights, further limits child labor, provides improved protections against discrimination and sexual harassment at work, and dramatically expands coverage of labor protections to more workers.
Uzbekistan: USTR is closing the GSP IP eligibility review of Uzbekistan opened in 1999, following Uzbekistan’s accession to the Geneva Phonograms Convention, the World Intellectual Property Organization (WIPO) Copyright Treaty, and the WIPO Performances and Phonograms Treaty. The GSP worker rights eligibility review of Uzbekistan will remain open.
New GSP Eligibility Reviews
Azerbaijan: In October 2017, USTR announced a new triennial process to assess GSP beneficiary country eligibility compliance with all the GSP eligibility criteria. This year’s assessment period covered GSP beneficiary countries in the Western Hemisphere and Europe. Based on this process, USTR is self-initiating a GSP eligibility review of Azerbaijan based on concerns with its compliance with the GSP worker rights criterion.
South Africa: USTR is accepting a petition from the International Intellectual Property Alliance based on concerns with South Africa’s compliance with the GSP IP criterion, in the area of copyright protection and enforcement.
USTR will announce dates for a public hearing and comment period for the new and existing GSP country eligibility reviews in an upcoming Federal Register notice.
GSP, the largest and oldest U.S. trade preference program, is designed to promote economic development by allowing duty-free entry into the United States for 3,500 products from the 119 designated beneficiary countries and territories. To remain eligible for these advantages, beneficiary countries must comply with 15 statutory eligibility criteria that are important to U.S. interests, including taking steps to afford internationally recognized labor rights, providing adequate and effective protection of intellectual property rights, and assuring equitable and reasonable access to its markets.
For more information on the GSP program, visit the GSP page on the USTR website here.
Source: Office of the United States Trade Representative