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US clamps down on rule enforcement for nations enjoying US preference

US President Donald Trump is implementing measures to enforce eligibility requirements for countries that participate in the US trade preference programme that enables them to export certain products into the United States duty free.

But the Generalised System of Preferences (GSP) programme will expire at the end of 2017 without congressional reauthorisation.

The US president partially suspended Ukraine from the GSP programme owing to its failure to adequately protect intellectual property rights (IPR) in spite of years of assistance from the US government.

As part of this suspension, the White House has decided to provide 120 days' notice, since the Ukrainian government has vowed to correct the problem, including toughening the existing laws governing royalty reimbursement to right holders' organisations, the administration said in a statement, reported American shipper.

Argentina will be reinstated to the GSP programme starting from January 1, following the resolution of certain arbitral disputes with US companies, new commitments by the Argentine government to improve market access for US agricultural products, and enhanced protection and enforcement of IPR. However, the US will not restore GSP benefits to certain eligible products due to a number of IPR concerns.

Mr Trump also restored African Growth and Opportunity Act (AGOA) duty-free benefits to Gambia after it lost this eligibility in 2015 due to human rights abuses.

Swaziland lost its AGOA eligibility in 2015 due to restrictions on freedoms of speech. The US set a series of benchmarks for Swaziland to reach in order to have its AGOA benefits restored. According to the Trump administration, the country achieved these benchmarks in November 2017.

In a separate development, the Office of the US Trade Representative is conducting an AGOA review for Rwanda, Tanzania and Uganda in response to a petition asserting that their phased ban on imports of used clothing is negatively impacting US jobs. This review is ongoing.

"President Trump has sent a clear message that the United States will vigorously enforce eligibility criteria for preferential access to the US market," US Trade Representative Robert Lighthizer was quoted as saying.

"Beneficiary countries choose to either work with USTR to meet trade preference eligibility criteria or face enforcement actions," he said. "The administration is committed to ensuring that other countries keep their end of the bargain in our trade relationships."

Some 120 developing countries and territories currently participate in GSP. In 2016, the total value of imports that entered the United States under the trade preference programme amounted to US$18.9 billion.

But GSP is expected to expire on December 31, costing companies that import from GSP countries US$75 million in duties per month until the programme is renewed by Congress.

In recent years, Congress has been unable to pass long-term GSP reauthorisations. Businesses argue that between the period when GSP expires and is eventually renewed, they are saddled with costly supply chain disruptions.