International Trade:

Reauthorization of the Generalized System of Preferences Program

T-GGD-95-104: Published: Feb 27, 1995. Publicly Released: Feb 27, 1995.

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GAO discussed the Generalized System of Preferences (GSP) Program and its reauthorization. GAO noted that: (1) a few beneficiary countries receive the majority of GSP benefits, but not all GSP-eligible products enter the United States duty-free because of certain program limitations; (2) the program generally has a well structured process for adding or removing products from GSP coverage; (3) program administration could be improved by disseminating more information on the GSP decisionmaking process and strengthening information requirements for acceptance of product petitions; (4) country practices petitions could be improved by more timely reviews, considering the country's failure to sustain progress in correcting its practices, and a more flexible schedule of sanctions; (5) adding additional country practices provisions would further reduce GSP leverage to encourage beneficiary countries to change their practices, particularly since recent trade agreements are expected to reduce GSP benefits; and (6) issues needing congressional consideration during GSP reauthorization include altering the GSP competitive need limit process and rule of origin and determining whether or not self-initiation of cases by the Trade Policy Staff Committee should be allowed where it has the effect of waiving the 3-year restriction on product rereviews.

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