Generalized System of Preferences (GSP)

GSP is the largest and oldest U.S. trade preference program that provides nonreciprocal, duty-free treatment enabling many of the world’s developing countries to spur diversity and economic growth through trade.  Economic development is promoted by eliminating duties on thousands of products when imported from designated beneficiary countries and territories.  Authorized by the Trade Act of 1974 and implemented on January 1, 1976, GSP is a preferential trade legislation that is subject to Congressional re-authorization.

Eligibility

Goods that are either wholly the growth, product, or manufacture of, or is a new or different article of commerce that has been grown, produced, or manufactured in, a beneficiary developing country may qualify for duty-free entry under GSP.  All third-country materials must have undergone a substantial transformation with at least 35 percent of the good’s appraised value be added in the beneficiary country.  The good must also be “imported directly” from the GSP eligible country.  For additional eligibility criteria, see 19 CFR 10.171 to 10.178 at https://www.ecfr.gov/cgi-bin/text-idx?SID=31017316ea7c410ae832bd10ed56f584&mc=true&node=sg19.1.10_1153.sg31&rgn=div7.

GSP Special Program Indicator (SPI): “A,” “A+,” and “A*”

Eligible tariff items are identified by the symbols “A”, “A*” or “A+” in the “Special” sub-column of the HTSUS.  Entries claiming GSP benefits must add SPI “A” as prefix to the tariff number.

• The symbol “A” indicates that all GSP countries are eligible (HTSUS General Note 4(a))
• The symbol “A*” indicates that certain GSP countries are ineligible (HTSUS General Note 4(d))
• The symbol “A+” indicates approximately 1,500 additional tariff items for which only the least developed beneficiary developing countries are eligible (HTSUS General Note 4(b))

Competitive Need Limitations

The GSP program imposes quantitative ceilings called Competitive Need Limitations (CNLs) on GSP benefits for all tariff items and beneficiary developing countries.  Under certain circumstances, these ceilings may be waived.  For more information, see USTR’s GSP Guidebook at https://ustr.gov/sites/default/files/gsp/GSPGuidebook_0.pdf.

Expiration of GSP SPI “A,” “A+,” and “A*”

On December 31, 2020, the GSP SPIs (“A,” “A+,” and “A*”) expired and is currently pending Congressional action to pass legislation for the program’s renewal.  Effective January 1, 2021 at 12:00am EST, GSP eligible goods entered or withdrawn from warehouse need to pay “General” (column 1) duty rates until further notice.

GSP Entry Summaries and Retroactive Refund   

Importers are encouraged to continue flagging GSP-eligible importations with SPI “A” and pay normal trade relations (column 1) duty rates during the lapse.  Importers may not file SPI “A” without paying duties.  In the event that GSP is renewed with a retroactive refund clause, CBP will be enabled to automate the duty refund process for entries flagged with the SPI “A” and no further action will be required by the filer to initiate the refund process.

Post Summary Correction (PSC) GSP Claims for Importations prior to Expiration

CBP will continue to allow post-importation GSP claims made via PSC and protest (19 USC 1514, 19 CFR 174) for importations made prior to GSP expiration.

CBP will not allow post-importation GSP claims made via PSC or protest for importations made after GSP expiration.

Goods Subject to Section 232 (aluminum and steel)

Trade preference may be claimed for all preference programs with the exception of GSP and the African Growth and Opportunity Act (AGOA).  Importers making a trade preference claim under a program other than GSP or AGOA may continue to receive the preferential duty rate and any manufacturing processing fee exemption that may apply in accordance with 19 CFR 24.23(c).  GSP and AGOA-eligible goods that are subject to Section 232 duties or quotas may not receive GSP or AGOA duty preference in accordance with 19 USC 2463(b)(2).  Section 232 duties must be paid on imports subject to Section 232 even if trade preferences apply.