GAO discussed the Generalized System of Preferences (GSP) program. GAO noted that: (1) most GSP benefits accrue to fewer than 10 of the 145 beneficiary countries; (2) many countries are not eligible for GSP benefits because of several program provisions that limit benefits; (3) although the GSP program has a generally well-structured administrative process, opportunities exist to promote better information on the decisionmaking process; (4) GSP program eligibility requirements create controversy that results in administrative problems; (5) adding new provisions to the GSP program would discourage beneficiary governments from complying with GSP guidelines; and (6) tariff reductions, if enacted, would further reduce U.S. leverage to demand compliance with GSP requirements.
Matter for Congressional Consideration
|In reauthorizing the GSP Program, Congress may wish to consider altering the competitive need limit process by, for example, extending the amount of time before exclusions under competitive need limits are implemented. This would allow for a more thorough assessment of the competitiveness of the affected imports and permit affected industries more time to adjust.|
|If Congress considers codifying the 3-year rule, and a provision disallowing its waiver, in the GSP statute, it should recognize that the Trade Policy Staff Committee's authority to self-initiate cases can have the same effect. Congress may wish to consider stipulating whether or not self-initiation of cases should be allowed where it would have the effect of waiving the 3-year rule.|