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Wednesday, November 28, 2012

Generalized System of Preferences: Agricultural Imports

Renée Johnson
Specialist in Agricultural Policy

The Generalized System of Preferences (GSP) provides duty-free tariff treatment for certain products from designated developing countries. Agricultural imports under the GSP totaled $2.4 billion in 2010, about one-tenth of all U.S. GSP imports. Leading agricultural imports include processed foods and food processing inputs, sugar and sugar confectionery, cocoa, processed and fresh fruits and vegetables, beverages and drinking waters, olive oil, processed meats, and miscellaneous food preparations and inputs for further processing. The majority of these imports are from Thailand, Brazil, Argentina, India, and Turkey. Some in Congress have continued to call for changes to the program that could limit GSP benefits to certain countries, among other changes. Opinion within the U.S. agriculture industry is mixed, reflecting both support for and opposition to the current program.

In the past few years, Congress has extended GSP through a series of short-term extensions. The program was most recently extended until July 31, 2013. Leaders of the House Ways and Means Committee and the Senate Finance Committee have continued to express an interest in evaluating the effectiveness of U.S. trade preference programs, including the GSP, and broader reform of these programs might be possible. Congress made changes to the program in 2006, tightening its requirements on imports under certain circumstances.

In early 2012 the Obama Administration implemented a number of actions affecting certain countries’ eligibility under the program, including suspending GSP eligibility of Argentina. Argentina is among the top beneficiary country of agricultural imports under the program, accounting for more than 10% of all agricultural imports under the GSP (ranked by import value). Under the program, Argentina exported more than $250 million of agricultural products in 2010, including casein, olive oil, prepared meats, gelatin derivatives, cheese and curd, sugar confectionery, wine, and other food products. The President suspended GSP benefits for Argentina because “it has not acted in good faith in enforcing arbitral awards in favor of United States citizens or a corporation, partnership, or association that is 50 percent or more beneficially owned by United States citizens.”

Date of Report: November 21, 2012
Number of Pages: 10
Order Number: RS22541
Price: $29.95

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