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Generalized System of Preferences (GSP)

A program providing for free rates of duty for merchandise from beneficiary developing independent countries and territories to encourage their economic growth.
GSP is one element of a coordinated effort by the industrial trading nations to bring developing countries more fully into the international trading system.
The GSP reflects international agreement, negotiated at the United Nations Conference on Trade and Development II (UNCTAD-II) in New Delhi in 1968, that a temporary and non-reciprocal grant of preferences by developed countries to developing countries would be equitable and, in the long term, mutually beneficial.
(U.S.) The U.S. GSP scheme is a system of nonreciprocal tariff preferences for the benefit of these countries. The U.S. conducts annual GSP reviews to consider petitions requesting modification of product coverage and/or country eligibility. United States GSP law requires that a beneficiary country’s laws and practices relating to market access, intellectual property rights protection, investment, export practices, and workers rights be considered in all GSP decisions.
The GSP eligibility list includes a wide range of products classifiable under approximately 3,000 different subheadings in the Harmonized Tariff Schedule of the United States (HTS or HTSUS). These items are identified either by an “A” or “A*” in the “Special” column 1 of the tariff schedule. Note that the eligible countries and eligible items change from time-to-time over the life of the program.
Eligible merchandise will be entitled to duty-free treatment provided the following conditions are met: (1) The merchandise must be destined for the United States without contingency for diversion at the time of exportation from the beneficiary developing country. (2) The UNCTAD (United Nations Conference on Trade and Development) Certificate of Origin Form A must be properly prepared, signed by the exporter and either be filed with the customs entry or furnished before liquidation or other final action on the entry if requested to do so by Customs. (3) The merchandise must be imported directly into the United States from the beneficiary country. (4) The cost or value of materials produced in the beneficiary developing country and/or the direct cost of processing performed there must represent at least 35 percent of the appraised value of the goods.
See Certificate of Origin Form A; Harmonized Tariff Schedule of the United States.

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