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Postmortem: Generalized System of Preferences (GSP)
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The Generalized System of Preferences Ends New Years Day
The GSP has been a provision of duty-free treatment to goods of designated countries since 1976. Designed to expire for reevaluation regularly, it is finally being left to expire in the new year.
Is this a good thing or a bad thing for trade? This was designed to make it easier for smaller countries to increase trade with our country, but does that mean it was an expense for those foreign goods to reach our shores?
Who will be affected?
Currently, there are 30+ countries that are relying on and depending on the GSP for specialty tax tariffs to make their trade more sustainably profitable.
Of those thirty countries, numerous GSP additions are relevant to specific trades.
There are too many industries being minutely affected by these changes to cover in one article. But if you want to know more, there is a detailed list and breakdown of this information here, make sure to choose the countries you know you are dealing with.
While the GSP is beneficial for many trade industries, it does seem that the current presidents own USTR are disregarding the GSP for the near future. You can read their official stance on the matter here.
But all is not lost. If you are worried that your trade routes will be affected by these changes, you can rest assured knowing that these lapses have occurred in the past before. In 2013 these changes lapsed for two years before being renewed in 2015.
After the renewal occurred, all the trade routes that were affected were also dealt a refund for the tariffs lost during that period.
In the short term, check to make sure and brace for a higher tax and import rate for your trade, however, do expect it to be repealed within the next few years as history often repeats itself.
Descubra cómo elegir una empresa de transporte internacional de mercancías, comparar opciones aéreas y marítimas, preparar documentos y calcular costos logísticos.
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