Press

As Congress debates renewal of “GSP” – the Generalized System of Preferences, the U.S.’ largest trade and development program, which waives tariffs on 3500 products for 119 low- and middle-income countries, and requires periodic reauthorization – it is right to take a new look at an old program and update old eligibility rules; but it should also be careful to avoid adding too many new ones, and balance them with fresh looks at old product restrictions, explains a new paper from Progressive Policy Institute (PPI) Vice President of Trade and Global Markets Ed Gresser.

“It is fair to ask governments of countries whose businesses and workers receive duty-free benefits to meet basic requirements, and some of the proposed new criteria are good ideas,” writes Ed Gresser. “But overly long lists of new criteria are likely to create confusion as U.S. policy priorities clash, and could force wholesale expulsion of poorer countries whose capacity to implement policy is lower than that of middle-income countries. This latter risk is particularly troubling.”

Gresser argues that Congress should be commended for endeavoring to update GSP but adding many new eligibility rules without expanding product coverage (which neither of the two major reauthorization bills achieve) risks leaving the revised program less effective than the current version.
The paper makes the following recommendations, which allow for rebalancing the GSP system while eliminating U.S. policy conflict and the exclusion of poor countries with weak capacity:

• Set a limited number of priorities, by adding several important new issues (for example, environmental policy) to the current list of 15 eligibility criteria, but restraining the number of new criteria.
• Make these priorities achievable for countries with good will but limited means and capacity.
• Simplify, by defining some proposed new criteria as “advisory” issues to consider, rather than requirements countries must meet, and clarify that to the extent possible, enforcement of criteria should not endanger the interests of the people the criteria aim to support.
• Add balancing new benefits, for example a reform of CNL rules proposed by Representatives Stephanie Murphy (D-Fla.) and Jackie Walorski (R-Ind.), and inclusion of some products currently barred from GSP.

Read the paper and expanded policy recommendations here:

Ed Gresser is Vice President and Director for Trade and Global Markets at PPI. He most recently served as the Assistant U.S. Trade Representative for Trade Policy and Economics at the Office of the United States Trade Representative (USTR).

The Progressive Policy Institute (PPI) is a catalyst for policy innovation and political reform based in Washington, D.C. Its mission is to create radically pragmatic ideas for moving America beyond ideological and partisan deadlock. Learn more about PPI by visiting progressivepolicy.org.

###

Media Contact: Aaron White – awhite@ppionline.org