What is GSP ( Generalised System of Preferences ) The GSP program is the largest and oldest US trade preference program and is designed ...
Generalised System of Preferences

What is GSP (Generalised System of Preferences)

The GSP program is the largest and oldest US trade preference program and is designed to promote economic development in developing countries. Provides duty-free entry for thousands of product categories from the designated beneficiary countries set by the US Harmonized Tariff Schedule.

1974 came into force Generalized System of Preferences (Generalized System of Preferences (GSP)), 131 countries in which Turkey is also found in developing countries, a total of 3 thousand 474 product into the field, the United States offers the possibility to import without payment of customs duties.

GSP status in the Process & Examined Countries

Turkey: In the beginning of 2018 August, the United States Trade Representative Office, start investigation for Turkey's GSP status based on concerns about compliance with the criteria for the import coverage System of Preferences (GSP) has announced that it is investigating the feasibility of participation in the program.

2019 In March, US President Trumph announced that, Turkey is economically sufficient and developed country, therefore could be remove from the GSP program. Presedent Trump send a letter to US congress about Turkey

Trump point that  Turkey's economy has grown and diversified, he also mentioned that Turkey already graduated from some other developed countries GSP programmes.

India: USTR has launched a GSP conformity review on India based on concerns about compliance with the GSP market access criteria. Considering India's trade barriers affecting US exports, India sought to revise the benefits of GSP. India imposes a wide range of trade barriers that have a serious negative impact on US trade. This is the import duties imposed by India on US products.

Indonesia: The USTR has initiated a GSP conformity review on Indonesia based on concerns about compliance with the GSP market access criteria and compliance with GSP services and investment criteria. Indonesia imposes a wide range of trade and investment barriers that have a serious negative impact on US trade. Import customs duties imposed on US products, as in the case of India.

Kazakhstan: According to a study conducted jointly by USTR, American Labor Federation and Industrial Organizations Congress, it was determined that Kazakhstan did not take steps to ensure internationally recognized workers' rights, including freedom of association and bargaining. Kazakhstan also allegedly actively restricts the right to form trade unions and employers' unions. Under these circumstances, the removal of GSP rights granted to Kazakhstan is on the agenda.

The next GSP assessment process will begin in the autumn of 2018 and will cover beneficiary countries in Eastern Europe, the Middle East and North Africa and the Western Hemisphere.

Removal from GSP

The US Congress has linked the removal of GSP from a GSP program to specific criteria. Accordingly, the total or sectoral advantages of the country's national income or foreign trade are evaluated on the basis of numbers. The reason for the exclusion from the GSP is that it is expected that countries that are developing economically and have increased competitiveness will no longer need support.

The removal from the GSP occurs in two ways:
1. A country whose national income is determined to be at the level of high-income countries based on the figures determined by the world bank may be excluded from the GSP status by the decision of the US President. This situation is considered as forced exclusion.

2. The level of economic development of a country under review and its competitive advantages in international trade are examined by the GSP committee, which is affiliated to the US Trade Agency (USTR).

As a result of this examination, even if the data available indicate that the country has not become an economically developed country, if the products imported from the United States to the United States find that they have a competitive disadvantage against the existing US domestic producers, may result.

However, the USTR submits changes to the GSP for approval by the US president. The final decision is made by the US President.

It is examined by the US Congress. This country may be excluded from the scope of the GSP with the decision of the Congress.

US President Trump's GSP Powers

Trump sent a letter to the President to Congress about Turkey completely removed from the list of expected congressional approval of the development. In other news, US Presidents, starting about 2018, such as India, Turkey and before the examinations in August, annual review, taking into account, can keep the list of countries outside that are taking advantage of readily GSP.

In addition, the GSP application is submitted to the President's signature every 2 years, but is not implemented until the President has signed it. Since GSP cannot be applied to imports to the US within the period between the expiry of 2 years and until the date of the President's revocation of GSP, the products are subject to customs duty.

As seen from past practices, after the President has renewed the process of renewing the GSP process, the tax amounts of the products, which have been paid import tax, are paid back to the importing companies. This is called a ci refund ”process. However, this process does not cover a single country, not extending the GSP period means that more than 100 countries included in the list will have to pay customs duties for imports to the US during this period.

How GSP Effects US Importer Companies

Importer firms should calculate the unit cost of the product to be imported and compare the competitiveness of the competitors with the competitiveness and profit margin. It may cause you to hard to sell the product in your domestic market and loss money.

Importers should regularly check the sales prices, shipping costs, customs costs and customs duty rates of suppliers in global markets. All these variables affect the unit cost of imported products.

If the exporter country graduate or remove from the GSP list, the imported goods automaticely lost the customs tax advantage. It means that; you will have to add customs duties to your unit cost. This debeple will be directly affected by GSP changes from the US importer company importing from a country covered by the GSP.

How the Customs Exemption for Import to GSP and the USA is Applied

GTIP codes of products which have customs exemption in US customs under GSP,
US State Trade Representative is checked from the list on the website:

If the ü GTIP code ürün, ie yer HS code ler for the product to be imported into the US, is listed in this list, the operations in the US Customs on the relevant product shall be made accordingly.

importers wishing to benefit from the GSP US companies or products from Turkey "DDP" with the type of delivery, namely customs duties paid by importers of selling addresses to be delivered to the Turkish exporting companies. During the process of customs clearance in the US lar CBP Form 7501 ”, GTIP requests an exemption from US customs duty by marking with: "A",.

Countries covered by GSP

  • Afghanistan
  • Congo (Brazzaville)
  • Congo (Kinshasa)
  • Jamaica
  • Nepal
  • Tanzania
  • Albania
  • Jordan
  • Niger
  • Thailand
  • Algeria
  • Ivory Coast
  • Kazakhistan
  • Nigeria
  • In Timor-Leste
  • Angola
  • Djibouti
  • Kenya
  • Pakistan
  • togo
  • Armenia
  • Dominica
  • Kiribati
  • Papua New
  • Guinea
  • Tonga
  • Azerbaijan
  • Ecuador
  • Kosovo
  • Paraguay
  • Tunisian
  • Belize
  • Egypt
  • Kirghizistan
  • Philippines
  • Turkey
  • Benin
  • Eritrea
  • Lebanon
  • Rwanda
  • tuvalu
  • Butane
  • Ethiopia
  • Lesotho
  • Saint Lucia
  • Uganda
  • Bolivia
  • Fiji
  • Liberia
  • St. Vincent
  • Grenadines
  • Ukraine
  • Bosnia Herzegovina
  • Gabon
  • Macedonia **
  • Samoa
  • Uzbekistan
  • Botswana
  • Gambia,
  • Madagascar
  • Sao Tomé
  • Principe Vanuatu
  • Brazil
  • Georgia Malawi
  • senegal
  • Yemen
  • Burkina Faso
  • Ghana
  • Maldives
  • Serbia
  • Zambia
  • Burma
  • Grenada
  • Financial
  • Sierra Leone
  • Zimbabwe
  • Burundi
  • Guinea
  • Mauritania
  • Solomon Islands
  • Cambodia
  • Guinea-Bissau
  • mauritius
  • Somalia
  • Cameroon
  • Guyana
  • Moldova
  • South Africa
  • Cape Verde
  • Haiti
  • Mongolia
  • South Sudan
  • Central African Republic
  • India
  • Montenegro
  • Sri Lanka
  • Chad
  • Indonesia
  • Mozambique
  • Suriname
  • Comoros
  • Iraq
  • Namibia
  • Swaziland



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