Home News Nigeria exports to US can now attract lower tariff under extended GSP

Nigeria exports to US can now attract lower tariff under extended GSP

by Business News Report

By Omoh Gabriel
Nigerian exporters and others can now restart their export to the United States of America under the Generalised System of Preferences which gave products from developing countries access to developed countries free of tariff. This is because the Generalised System of Preferences officially ended last year but has now been extended to 2013 under the new US law that was signed by President Obama last month. This system requires exporters from Nigeria and other developing countries to accompany their products with certificate of origin.

The US President signed into law on October 21 a bill that extends both the U.S. Generalized System of Preferences (GSP) and the Trade Adjustment Assistance (TAA) programme. The Senate had approved the legislation on September 22 by a vote of 70-27, followed by the House on October 12 by a vote of 307-122. Passage of the legislation was delayed due to partisan procedural wrangling over how to proceed with this and other trade legislations implementing three pending free trade agreements with Colombia, Korea, and Panama, i.e. which comes first, TAA or FTA?
GSP provides preferential, duty-free tariff treatment to certain imports from developing and least developed countries, up to a certain limit. To qualify, an import must be included on a list of eligible articles, imported directly from a beneficiary country, and meet certain minimum value-added requirements.

There are 129 countries that currently benefit from GSP, including 42 least-developed beneficiary countries. Most dutiable manufactured and semi-manufactured products qualify for GSP, as well as certain agricultural, fishery, and primary industrial products, with the exception of most textiles and apparel, footwear, and import-sensitive steel, glass, and electronic articles.

The legislation extends GSP until July 31, 2013, with retroactive effect to December 31, 2010 when it expired. Importers were instructed by Customs and Border Protection to continue to flag GSP-eligible imports while paying the normal trade relations duty rate since the expiration. Such importers will receive a refund on the duties paid pursuant to forthcoming Customs and Border Protection instructions.

The TAA programme provides transitional benefits to workers who lose their jobs due to international trade. These benefits include retraining allowances, income support, and help with healthcare costs. In 2010 alone, 227,822 U.S. workers received TAA-funded benefits and services. The legislation extends TAA through the end of 2013, with retroactive effect to February 12, 2011, when certain group eligibility requirements and individual benefits and services expired. Petitions for TAA benefits that were denied after February 12, 2011 will be reviewed under the new eligibility requirements, and individuals who began receiving benefits after February 12, 2011 may choose to receive the new benefits and services.

The renewal of both programmes may have a positive impact on U.S. manufacturing. According to the United States Trade Representative, up to three fourths of U.S. imports under GSP are used as inputs for U.S. manufactured goods and will continue to receive duty-free treatment. The renewal of the TAA programme is also important for the manufacturing sector as it can cushion the shock of trade-related lay-offs and plant closings, and assist in retraining trade-impacted workers for new and different jobs in the manufacturing sector.

Related Posts