Trade Agreements/Preferential Duty Programs

What is the Generalized System of Preferences (GSP)?

The Generalized System of Preferences (GSP) is a program providing for free rates of duty for merchandise from beneficiary developing independent countries and territories to encourage their economic growth. GSP is an element of a coordinated effort by the industrial trading nations to bring developing countries more fully into the international trading system. The U.S. GSP scheme is a system of non-reciprocal tariff preferences for the benefit of beneficiary developing countries. The GSP eligibility list includes a wide range of products classifiable under approximately 3,000 different subheadings in the Harmonized Tariff Schedule of the United States (HTS or HTSUS). Eligible merchandise will be entitled to duty-free treatment provided the following conditions are met: (1) the merchandise must be destined for the United States without contingency for diversion at the time of exportation from the beneficiary developing country; (2) the UNCTAD (United National Conference on Trade and Development) Certificate of Origin Form A must be properly prepared, signed by the exporter and either be filed with customs entry or furnished before liquidation; (3) the merchandise must be imported directly into the United States from the beneficiary country; and (4) the cost or value of materials produced in the beneficiary developing country and/or the direct cost of processing performed there must represent at least 35 percent of the appraised value of the goods.

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