u.s. trade preference programs: lessons for europe from the u.s. struggle to get it right
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8/8/2019 U.S. Trade Preference Programs: Lessons for Europe from the U.S. Struggle to Get It Right
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Economic Policy PaPEr SEriES 2010
U.S. TradE PrEfErEncE ProgramS:
lESSonS for EUroPE from ThE
U.S. STrUgglE To gET iT righT
laUra m. BaUghman
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U.S. rade Preference Programs: Lessons forEurope from the U.S. Struggle to Get It Right
Economic Policy Paper Series
December 2010
L M. B
T P
L B P, W, DC, . S xv C GSP, U.S. v C A w Gz S P (GSP) A- , w w U.S. v v U S.
vw G M F U S.
Exv S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Ovvw U.S. P P . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
A U.S. P P Wk? . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
P R U.S. P P. . . . . . . . . . . . . . . . . . . . . .
L E . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
C . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Ax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
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U.S. rade Preference Programs: Lessons for Europe from the U.S. Struggle to Get It Right iii
Executive Summary
I D 9, L E U,
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U.S. rade Preference Programs: Lessons for Europe from the U.S. Struggle to Get It Right 1
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Introduction
1
Politics diminishes
ability of preferenc
programs to
promote sustainab
development.
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he German Marshall Fund of the United States2
U S , v
C .
A , v
(BDC) x U.S. x
,
w v : Gz
S P (GSP), w
w;
A Gw O A (AGOA);
w C- (
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A P D E
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E
, v,
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35
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Generalized System of Preferences
GSP - — ,
v — U.S.
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Overview of U.S. Preference Programs
2
C V) .
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x , w
, w , v-q
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Caribbean Preference Programs (CBERA/
CBTPA)
U.S. C
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U.S. x -
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W (FA) .P J v x. , x,Mx C GSP w FA w U S .
A - v.
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U.S. rade Preference Programs: Lessons for Europe from the U.S. Struggle to Get It Right 3
W q U.S.
Mx N A F
A (NAFA) w v
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x
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, ,
v- .
Andean Preference Programs (ATPA/ATPDEA)
A ,
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P A (APA) 99, w v
v w q
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P D E A (APDEA)
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, .
x : P, Bv,
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- U.S.
x ,
j q . Lk
GSP, APA/APDEA x
C w
w , .
Haitian Hemispheric Opportunity through
Partnership Encouragement (HOPE) Act
CBPA w w HOPE D
6 v H w , -
U.S. k. A w v
x
, w v
8
x v
. U CBPA, H x
- U S w
k-- U.S. . U
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v , w
.
U.S. x
w U S
C v
C .
A w v HOPE
, q
- I L
Oz , .
4 Bv APA 9; wv, APA v GSP.
As with every other
preference program
extended benefits t
apparel, the first ef
was too restrictive t
useful and ultimate
had to be amended
8/8/2019 U.S. Trade Preference Programs: Lessons for Europe from the U.S. Struggle to Get It Right
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he German Marshall Fund of the United States4
African Growth and Opportunity Act (AGOA)
AGOA - 38 A
x - U
S.5 F ,
v —
w x x
v
. N, AGOA x
GSP’ v . O ,
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v v ,
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,
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Chart 1: U.S. Imports under U.S. Preference Programs, by Program
NOE: D HOPE v
S: U.S. C B
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U.S. rade Preference Programs: Lessons for Europe from the U.S. Struggle to Get It Right 5
Qualifying Industrial Zones (QIZs)
A x U.S.-I F
A (FA) 996, QIZ
x z. QIZ
q, k
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,
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)
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w
x, 3) w v U.S.
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— —
z 35 v-
U S -. ,
v QIZ J,
E. w
.
Current Program Utilization and Proposed
Additional Programs
C w AGOA GSP
U.S.
v U
S v - .
v
“”
. W GSP ,
v v , - 99
q x
v w.
Ov v U.S. v
z k (U.S.-
Chart 2: Total U.S. Imports under All U.S. Preference Programs, 1976-2008
(Share of total dutiable imports)
S: U.S. C B
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he German Marshall Fund of the United States6
I 985, U.S.-C 989, NA F 994)
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R 985), v
U.S.
w v . C w
-
989 (w “A ”
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w w
x x .
w
,
v
v .
A , w
C. w
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v — v .
:
•“Reconstruction Opportunity Zone”
Preferences for Afghanistan and Pakistan.
L U.S. H
Rv S w x
-
A ()
Pk, “R O
Z” (ROZ). ROZ w
x z, -
v v
. ROZ
w x -
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, v ) ROZ.
w
q ,
, .
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RADE A 9,” z P
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C (IC), P
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M , w x AGOA-k
- , w qv
, x
v (BDC)
U.S. q.
•Philippines: The SAVE Act. “Sv O
I A 9 SAVE A,”
H, -
Significant opposition
resulted in the scopeof the benefits being
uite limited — so much
so that the view of
many U.S. consumers
is that the proposal is
ultimately unworkable.
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U.S. rade Preference Programs: Lessons for Europe from the U.S. Struggle to Get It Right 7
- w U S
P, ,
)
U
S P, v
w U
S; ) k--
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.
•Paraguay and Uruguay. B H S, “U.S.-P
P A 9,” APA
APDEA P
-
APDEA
. O
S w P U
-
APA/APDEA.
•New Partnership for Trade Development Act of
2009. w x -, q-
v
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35 v- . I x AGOA
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B
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vw
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. I kw C w v
“ v” v
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(LDC),
v v
v GSP v
w v .
x w
(GSP APDEA D 3, )
C v , , w
.
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he German Marshall Fund of the United States8
W , w w
-
. A
w : w
w, k, x
v ,
U S. q
:
•Appliestotheproductsdevelopingcountries
k;
•Iscertain,reliable,predictable,andlong-term;
•Issimpletouse;
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v-
;
•Issensitivetobeneficiaries’differingorunique
v ;
•Whereverpossible,islinkedtotargeted
k v
k .
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,
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w
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CBI II, w w w CBPA (w
v), w w w j
HOPE I HOPE II. AGOA, w,
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Inadequate Product Coverage
O U.S. GSP
x k
v : x ; w;
, . I,
v
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x
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x, j -
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Difficult Rules of Origin
G, U.S. 35
v- -
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q . Hwv, ,
U.S. x
C H
v U.S.
, w
v
k — .
x v
U.S.
wk q BDC
x. I ,
Are U.S. Preference Programs Working?
3
successful preference
program must meet
the needs of two
constituencies: those
who grow, make, and
export goods in the
beneficiary developing
country, and their
customers.
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U.S. rade Preference Programs: Lessons for Europe from the U.S. Struggle to Get It Right 9
BDC . C
w U.S. FA
, .
Inconsistent Requirements for Eligibility
U.S. v
, w v
w
w.
C v w
w
w w . O,
, w
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x, w w
.
BDC
U S
w BDC w q .
Complicated Procedures
U x U.S. , BDC ( )
P
. U GSP,
v ( - v)
v vw
. S, j w :
6, w C I
Bz W
Oz’ D
w
. v w
k I Bz v - .
Iv (
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w x “v
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U.S. . CNL “v,”
, x,
w
. I , vw
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D
,
.
I ,
, v ,
jv . I ,
k .
Unpredictable Benefits
v
v,
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x CBI QIZ, U.S.
, U.S. v
.
q U.S. v
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“---,” “-.”
“ ” w
v . P
“” v. F
v
w , -
x ,
GSP w v
.
Constraints on Foreign Production/Exporting
U S x ($.3
FY8)
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he German Marshall Fund of the United States10
(CBA) v .U,
v
v-
v .
v. Ov 5 U.S. v
v CBA,
w v
w v,
, , v
z CBA .
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w v BDC
k k v
U.S. ,
q q,.. (k
/ ) .
I ,
BDC
U S w
BDC w q w
w v -
w U.S. .
wk
q BDC x. C v
. O, vv
x
v
.
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U.S. rade Preference Programs: Lessons for Europe from the U.S. Struggle to Get It Right 11
Rz v
v — v
— k k, v
z, ,
, v,
v -
, v 9, v
w
v
. w
v
z q w . W
w , w
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v
v
.
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w
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“k” w w , , ,
-; ; v
;
w v ’ q
v ; , wv , w
k
k k
v k .
I D 9, x
:
1. One Program Covering All Products
U S
x -
BDC, v ,
- q- (DFQF) -v .
2. Clear Country Eligibility Requirements
w v
,
v .
v v
v ,
wk
k
U.S. k.
v v BDC
w v v
v. Wv ,
U S
w ,
. Nw q
x , w
wk k
w
.
w
.
jv v v
v. I
v U.S.
GSP w “
v ” jv,
, v
BDC -S A.
w q P v ’
, , , . I
v j
x U.S. ,
v , ,
Proposals for Reform of
U.S. Preference Programs4
Something had to b
done to improve the
ability of preferenc
programs to suppo
meaningful and
sustained developm
in beneficiary coun
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he German Marshall Fund of the United States12
, k , , v, / ,
//.
3. A Simple Rule of Origin for All Products
,
, w
BDC ,
WO, w
w U S.
“ ”
35 v ,w v
BDC, BDC, U
S, U.S. FA ,
BDC BDC, w 35
.6
4. Simple, Clear Product “Graduation” Processes
B w
v jv
,
“” ,
GSP ,
. I ,
P
, ,
.
P wk w
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6 , , w BDC, v w 35 q.
x,
, -LDC , x
x GSP v --
- “
.” D
w,
jv
v w
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x
v ( v) ,
.
5. Capacity Building Linked to Preferences
(CBA),
v,
v w BDC
k, k
v v, w
w,
, k.
I P k
v vw w v
w CBA ,
k, ,
NGO, BDC v, U.S. (U.S.
), w wk
z, v
z.
v CBA v
w v
w -
v, w
k , -S
A.
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U.S. rade Preference Programs: Lessons for Europe from the U.S. Struggle to Get It Right 13
A , P k v
,
, NGO, wk
z, , w
wk w v
v
. vw w
z .
A )
) “w v”
-S A w q
. wk v
w A v, ,
v z, ,
w
,
A’ . I ,
R E
C (REC)
Dv C, w x
wk
k v
, .. w w .
6. Long Term Benefits
LDC x v
BDC, w w v
P C
BDC v (
v)
WO D Dv R
. I P
v WO
D R, w x . U D
, -LDC BDC w
x .
Sv BDC
A,
x U.S.
x .7 Rw
, AGOA,
v
w k w.
M q C
. M k v
U.S.
. M
v w
U.S. . A
k v
v v -x v
. U.S. x
35 v-
x
v
B C. Ev
w v
, U.S.
. I (IPR)
w ’ IPR
, k k BDC
v. S
C v k
D
Dv A WO,
v w
v , k w w v
v v
7 C A BDC v x w k j q x v w v , .
Additional
recommendations
include working
collaboratively with
African governmen
regional institutions
nongovernmental
organizations, and
businesses.
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he German Marshall Fund of the United States14
w — v . Iv U.S.
k v
v v .
U w x v
w v
v.
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U.S. rade Preference Programs: Lessons for Europe from the U.S. Struggle to Get It Right 15
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he German Marshall Fund of the United States16
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U.S. rade Preference Programs: Lessons for Europe from the U.S. Struggle to Get It Right 17
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he German Marshall Fund of the United States18
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U.S. rade Preference Programs: Lessons for Europe from the U.S. Struggle to Get It Right 19
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he German Marshall Fund of the United States20
Appendix:
Comparison of U.S. Preference Programs
GSP ATPA/ATPDEA AGOABenefits
Duty-free treatment for 131 eligible beneficiary
developing countries/territories (BDCs)
Benefits
Duty-free treatment for Bolivia, Colombia, Peru,
Ecuador (Bolivia suspended from benefits)
Benefits
Duty-free treatment for 38 eligible BDCs in
sub-Saharan Africa
Product Coverage
All products EXCEPT:
•Most textile and apparel articles
•Most footwear, handbags, luggage, flat
goods, work gloves, and leather wearing
apparel
• Certain watches & parts
•Above-quota imports of certain agricultural
products subject to tariff rate quotas (TRQs)• Import-sensitive electronic articles
• Import-sensitive steel articles
• Import-sensitive semimanufactured and
manufactured glass products
Affects >3,400 eligible products (out of
>10,500 total)
Product Coverage
All products EXCEPT:
• Nonqualifying textile and apparel articles
•Above-quota imports of certain agricultural
products subject to TRQs
• Canned tuna
• Rum and tafia
• Sugars, syrups, and sugar-containing
products above TRQ levels• Certain import-sensitive footwear
These products can be EXCLUDED if found to
be import-sensitive:
• Tuna in pouches
• Leather products
• Other footwear
• Petroleum & petroleum products
•Watches & watch parts
Affects >5,700 eligible products (out of
>10,500 total)
Product Coverage
All products EXCEPT:
• Non-qualifying textile or apparel products or
those that exceed specified caps
•Above-quota imports of certain agricultural
products subject to TRQs
• Certain steel products
• Canned peaches and apricots
•
Dehydrated garlic
Affects “substantially all” products (>10,500)
Key Conditions for Eligibility Common to at least four Preference ProgramsBeneficiaries must not:
• Be a communist country
• Provide preferential treatment to other developed countries but not the United States
• Nationalize, expropriate, or seize U.S. property without compensation
•Aid or otherwise support international terrorism
Beneficiaries must:
•Afford or take steps to afford internationally recognized worker rights defined as the right of association; the right to organize and bargain
collectively; a prohibition on the use of any form of forced or compulsory labor; a minimum age for the employment of children; and acceptable
conditions of work with respect to minimum wages, hours of work, and occupational safety and health
•Meet its commitments to eliminate the worst forms of child labor, defined as all forms of slavery or similar practices like the sale or trafficking
of children, debt bondage and serfdom, or forced labor, including forced or compulsory recruitment of children for use in armed conflict; child
prostitution, the production of child pornography; use of a child for illicit activities like drug production and trafficking; and work that, by its nature
or the circumstances, could harm the health, safety, or morals of children
Beneficiaries should:
• Provide the U.S. access to its markets (including basic commodity resources) and assure the United States that it will not engage in unreasonable
export practices
• Have in place a system to fight corruption, or be a party to an anti-corruption treaty or convention
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U.S. rade Preference Programs: Lessons for Europe from the U.S. Struggle to Get It Right 21
CBERA/CBTPA HOPE QIZsBenefits
Duty-free or reduced-duty treatment for
18 countries in the Caribbean region
(including Haiti)
Benefits
Enhanced CBPTA benefits for Haiti
Benefits
Duty-free benefits for products from “qualifying
industrial zones” in Egypt and Jordan
Product Coverage
All products EXCEPT:
• Nonqualifying textile/apparel products or
those that exceed specified caps
• Certain footwear
• Certain watches & parts
• Above-quota imports of certain agricultural
products subject to TRQs
•
Canned tuna• Petroleum and products
Affects about 5,400 products (out of >10,500)
Product Coverage
Apparel and automotive wiring sets
Product Coverage
All products
Key Conditions for Eligibility Common to at least four Preference ProgramsBeneficiaries must not:
• Be a communist country
• Provide preferential treatment to other developed countries but not the United States
• Nationalize, expropriate, or seize U.S. property without compensation
• Aid or otherwise support international terrorism
Beneficiaries must:
• Afford or take steps to afford internationally recognized worker rights defined as the right of association; the right to organize and bargain
collectively; a prohibition on the use of any form of forced or compulsory labor; a minimum age for the employment of children; and acceptable
conditions of work with respect to minimum wages, hours of work, and occupational safety and health
• Meet its commitments to eliminate the worst forms of child labor, defined as all forms of slavery or similar practices like the sale or trafficking
of children, debt bondage and serfdom, or forced labor, including forced or compulsory recruitment of children for use in armed conflict; child
prostitution, the production of child pornography; use of a child for illicit activities like drug production and trafficking; and work that, by its nature
or the circumstances, could harm the health, safety, or morals of children
Beneficiaries should:
• Provide the U.S. access to its markets (including basic commodity resources) and assure the United States that it will not engage in unreasonable
export practices
• Have in place a system to fight corruption, or be a party to an anti-corruption treaty or convention
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he German Marshall Fund of the United States22
GSP ATPA/ATPDEA AGOAOther Eligibility Criteria
Beneficiaries must not:
• Be a developed country or member of the
European Union
• Be a member of a commodity cartel
• Have a per capita income that exceeds that
of a high income country as defined by the
World Bank (currently, $11,116)
Beneficiaries should:
• Provide adequate and effective protection of
intellectual property rights
• Reduce trade-distorting investment practices
and policies including export performance
requirements
• Reduce or eliminate barriers to trade in
services
Other Eligibility Criteria
Beneficiaries must not:
• Fail to recognize or enforce binding arbitral
awards favoring U.S. citizens/business
entities
• Permit government-owned entity broadcasts
of U.S. copyrighted material without consent
or fail to work towards the provision of
adequate and effective protection of
intellectual property rights
• Permit government-owned entity broadcasts
of U.S. copyrighted materials without consent
Beneficiaries should:
• Reduce trade-distorting practices and
policies including export performance and
local content requirements
• Have laws and effectively enforce laws that
protect foreign intellectual property rights
and provide IPR protection that is consistent
with or greater than TRIPs requirements
•Abide by its WTO Agreement obligations
•Meet narcotics cooperation and
counternarcotics certification criteria
•Apply government procurement procedures
equivalent to those in the WTO’s GPA
•Meet narcotics cooperation and
counternarcotics certification criteria
Other Eligibility Criteria
Beneficiaries must not:
• Be a member of a commodity cartel
• Fail to recognize or enforce binding arbitral
awards favoring U.S. citizens/business
entities
• Engage in activities that undermine U.S.
national security or foreign policy interests or
constitute gross violations of internationally
recognized human rights
Beneficiaries must have established, or be
making continual progress toward establishing:
•A market-based economy that protects
private property rights, incorporates an open
rules-based trading system, and minimizes
government interference in the economy
• The rule of law, political pluralism, and the
right to due process
• The elimination of barriers to U.S. trade and
investment, including national treatment, IPR
protection, and resolution of bilateral trade
and investment disputes
• Policies to reduce poverty, increase the
availability of health care and education,
expand infrastructure, promote development
of private enterprise, and encourage
formation of capital markets
Beneficiaries must also:
• Provide adequate and effective IPR
protection
• Reduce trade-distorting investment practices
and policies including export performance
requirements
• Reduce or eliminate barriers to trade in
services
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U.S. rade Preference Programs: Lessons for Europe from the U.S. Struggle to Get It Right 23
CBERA/CBTPA HOPE QIZsOther Eligibility Criteria
Beneficiaries must not:
• Fail to recognize or enforce binding arbitral
awards favoring U.S. citizens/business
entities
• Permit government-owned entity broadcasts
of U.S. copyrighted materials without consent
Beneficiaries should:
• Reduce trade-distorting practices and
policies including export performance and
local content requirements
• Have laws and effectively enforce laws that
protect foreign intellectual property rights
and provide IPR protection that is consistent
with or greater than TRIPs requirements
• Follow rules of international trade provided
for under multilateral Agreements
• Apply government procurement procedures
equivalent to those in the WTO’s GPA
• Meet narcotics cooperation and
counternarcotics certification criteria
Other Eligibility Criteria
The President must determine and Congress
must certify that Haiti has established, or is
making continual progress toward establishing:
•A market-based economy
• The rule of law, political pluralism, and the
right to due process, a fair trial, and equal
protection under the law
• The elimination of barriers to United
States trade and investment, including
by the provision of national treatment
and measures to create an environment
conducive to domestic and foreign
investment; the protection of intellectual
property; and the resolution of bilateral trade
and investment disputes
• Economic policies to reduce poverty,
increase the availability of health care and
educational opportunities, expand physical
infrastructure, promote the development
of private enterprise, and encourage the
formation of capital markets
• Does not engage in activities that undermine
United States national security or foreign
policy interests
• Does not engage in gross violations of
internationally recognized human rights
and cooperates in international efforts to
eliminate human rights violations
Haiti must establish a Labor Ombudsman
Office to oversee compliance with labor
conditions in HOPE, and start a program
that uses the ILO for technical assistance
to monitor the compliance with core labor
standards of apparel producers who want to
export to the U.S.; ILO must issue a report
every six months evaluating the progress of
each producer.
Other Eligibility Criteria
None
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he German Marshall Fund of the United States24
GSP ATPA/ATPDEA AGOARules of Origin
Eligible products must:
• be imported directly from a BDC into the
United States
• be wholly the growth, product, or
manufacture of a BDC or be substantially
transformed into a new or different article
in the BDC
• 35% of the value of the product must be
added in a single BDC or in a specified
association of eligible BDCs
No U.S. contented counts.
Rules of Origin
Eligible non-textile/apparel products must:
• be imported directly from a BDC into the
United States
• be wholly the growth, product, or
manufacture of a BDC or be substantially
transformed into a new or different article
in the BDC
• contain a minimum of 35% local content of
one or more CBTPA BDCs (or 20% if 15%
of the minimum content comes from the
United States)
Textile/apparel product rules:
• complicated requirements for the use of U.S.
or regional fabrics, yarns, cutting, thread
• some exceptions for short supply yarns/
fabrics, handmade, or folklore articles
Rules of Origin
Eligible non-textile/apparel products must:
• be imported directly from a BDC into the
United States
• be wholly the growth, product, or
manufacture of a BDC or be substantially
transformed into a new or different article
in the BDC
• contain a minimum of 35% local content
of one or more AGOA BDCs (or 20% if 15%
of the minimum content comes from the
United States)
Textile/apparel product rules:
• complicated requirements for the use of U.S.
or regional fabrics, yarns, cutting, thread
• some exceptions for short supply yarns/
fabrics, handmade, or folklore articles
• exception for third country fabric usage by
LDCs, subject to caps
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U.S. rade Preference Programs: Lessons for Europe from the U.S. Struggle to Get It Right 25
CBERA/CBTPA HOPE QIZsRules of Origin
Eligible non-textile/apparel products must:
• be imported directly from a BDC into the
United States
• be wholly the growth, product, or
manufacture of a BDC or be substantially
transformed into a new or different article
in the BDC
• contain a minimum of 35% local content of
one or more CBTPA BDCs (or 20% if 15%
of the minimum content comes from the
United States)
Textile/apparel product rules:
• complicated requirements for the use of U.S.
or regional fabrics, yarns, cutting, thread
• some exceptions for short supply yarns/
fabrics, handmade, or folklore articles
Rules of Origin
Apparel imports from Haiti are duty free if at
least 50% of the value of inputs and/or costs
of processing are from any combination of U.S.
FTA and regional preference program partner
countries, subject to quantity caps.
Capped volumes of woven apparel permitted
when made with fabric from any country.
Automotive wire harnesses imported from
Haiti must contain at least 50% by value
of materials produced in Haiti, U.S. FTA, or
regional preference program countries to
qualify for duty-free treatment.
Rules of Origin
• A product must be wholly the growth,
product, or manufacture of the QIZ, or a new
or different article of commerce that was
grown, produced or manufactured in the QIZ
• The sum of the cost or value of the materials
produced in the QIZ, the West Bank, the
Gaza Strip, or Israel PLUS the direct costs
of processing operations in the QIZ, the
West Bank, The Gaza Strip, or Israel is not
less than 35% of the appraised value of the
goods (U.S. inputs can account for up to
15% of the appraised value in meeting the
35% value-added requirement)
• It must be imported directly from the QIZ
or Israel.
The agreement reached by Israel and the QIZ
partner country establishes the details of the
division of the 35% value added requirement.
For textile and apparel products, the rule of
origin is the so-called “Breaux-Cardin” rule, i.e.,
location of assembly for apparel. Products can
be shipped to the United States from either
Israel or the QIZ partner country.
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he German Marshall Fund of the United States26
GSP ATPA/ATPDEA AGOALoss of Benefits
A BDC can lose benefits if:
• It reaches the per capita income cut-off
($11,116)
• It no longer meets one or more of the other
eligibility criteria
• The President determines that the BDC’s
advances in economic development and
trade competitiveness warrant graduation
President can withdraw duty-free treatment for
any product that the President determines to
be import-sensitive in the context of GSP.
“Competitive Need Limits, CNLs.” GSPbenefits terminate for a particular product
imported from a BDC if the imports from the
BDC of that product during any calendar year: 1)
account for 50% or more of the value of total U.S.
imports of that product; or 2) exceed a certain
dollar value. Statute increases the dollar-value
limit by $5 million annually (the limit was $135
million in 2008, and is $140 million in 2009).
Waivers of CNLs. CNLs can be waived if
imports of the product from the BDC drop below
the CNL limit in a subsequent year and someone
files a petition for a waiver (waivers are not
automatic). A decision to grant a waiver depends
in large part on whether the country is providing
reasonable and equitable access to its market
for U.S. goods and services and reasonable and
effective protection of U.S. IPR. The percentage
provision is waived for certain GSP eligible
articles that were not produced in the United
States on January 1, 1995.
De minimis waiver: Provided when total
U.S. imports from all countries of a product
are small or “de minimis.” The de minimis level
is adjusted each year, in increments of $0.5
million (the 2008 level was $19 million, and
2009 level was $19.5 million). A de minimis
waiver is automatically considered for all BDCsthat exceeded the percentage competitive
need limitation for a product where total
imports from all countries for the preceding
year were below the de minimis level. Such
waivers cannot be requested by petition, but
public comments are accepted. Granting
such waivers is a discretionary decision of the
President.
(column continued on next page)
Loss of Benefits
[No per capita income cut-off.]
[No CNLs]
BDCs may lose benefits in whole or in part
if they no longer meet one or more of the
eligibility requirements.
Apparel products may lose benefits as a result
of a safeguard action.
Products subject to a Section 201 action lose
CBTPA duty-free treatment.
The President/ITC must conduct reviews every
2 years of each BDC and the economic impact,
including on U.S. employment, of the ATPDEA.
The Department of Labor must make annual
reports to Congress on the impact of ATPDEA
on U.S. labor.
Loss of Benefits
[No per capita income cut-off.]
[No CNLs]
BDCs may lose benefits in whole if they are not
making “continual progress” in meeting one or
more of the eligibility requirements.
Apparel products may lose benefits as a result
of a safeguard action.
Annual review by President of BDC eligibility.
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U.S. rade Preference Programs: Lessons for Europe from the U.S. Struggle to Get It Right 27
CBERA/CBTPA HOPE QIZsLoss of Benefits
No per capita income cut-off.]
[No CNLs]
BDCs may lose benefits in whole or in part
if they no longer meet one or more of the
eligibility requirements.
Apparel products may lose benefits as a result
of a safeguard action.
Products subject to a Section 201 action lose
CBTPA duty-free treatment.
Sugar and beef products may lose benefits if
BDCs do not have an acceptable stable food
production plan.
The President/ITC must conduct reviews every
2 years of each BDC and the economic impact,
including on U.S. employment, of the CBTPA.
Loss of Benefits
[No per capita income cut-off.]
[No CNLs]
Haiti can lose benefits if it no longer meets one
or more of the eligibility criteria.
Loss of Benefits
Permanent
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he German Marshall Fund of the United States28
GSP ATPA/ATPDEA AGOA
Duration of waivers. A waiver remains
in effect until the President determines that
it is no longer warranted due to “changed
circumstances.” The statute also provides that
the President “should” revoke any waiver that
has been in effect for at least five years, if a
GSP-eligible product from a specific country
has an annual trade level in the previous
calendar year that exceeds 150% of the
annual dollar-value limit or exceeds 75% of all
U.S. imports.
Limitations on CNL waiver authority.
The total value of U.S. imports from allbeneficiary countries benefiting from the waiver
cannot exceed 30% of the total value of GSP
imports in a calendar year. Countries having
a per capita GNP greater than $5,000 or that
account for 10% or more of total GSP benefits
cannot be granted waivers, with an aggregate
value equal to more than 15% of GSP imports.
Extra Benefits for Least Developed
Countries
“Least developed countries” (LDCs) are
typically those defined by the United Nation as
least developed countries.
42 eligible LDCs get benefits for an additional1,434 products otherwise excluded from GSP.
LDCs are not subject to CNL limits.
Extra Benefits for Least Developed
Countries
N/A
Extra Benefits for Least Developed
Countries
LDCs are eligible for “third country fabric” rule,
which permits them to make apparel using
fabric or yarn from non BDCs and still qualify
for duty-free treatment. Total volume of this
trade is subject to caps.
Trade Capacity Building
None
Trade Capacity Building
None
Trade Capacity Building
Technical assistance provided for
Termination
Expires 12/31/2010
Termination
Expires 12/31/2010
Termination
Third country fabric rule expires 9/30/2012;
all benefits expire 09/30/2015
Source: The Trade Partnership from USTR, ITC, CRS documents; texts of legislation.
(continued)
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U.S. rade Preference Programs: Lessons for Europe from the U.S. Struggle to Get It Right 29
CBERA/CBTPA HOPE QIZs
Extra Benefits for Least Developed
Countries
N/A
Extra Benefits for Least Developed
Countries
N/A
Extra Benefits for Least Developed
Countries
N/A
Trade Capacity Building
None
Trade Capacity Building
None
Trade Capacity Building
None
Termination
Expires 9/30/2020
Termination
CBTPA expires 9/30/2018, CBI is permanent
Termination
None
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he German Marshall Fund of the United States30
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8/8/2019 U.S. Trade Preference Programs: Lessons for Europe from the U.S. Struggle to Get It Right
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