TRADE ALERT

GSP Renewal

(November 13, 2006)

The Generalized System of Preferences (GSP) is set to expire at the end of 2006. GSP is a valuable trade preference program designed to promote economic growth in the developing world and relied upon by U.S. companies as a competitive source for components and raw materials.

Legislation was introduced in the House of Representatives just before Congress recessed in October to extend the program for two years. Congressional action now is crucial. Failure to renew the program now will result in the immediate imposition of duties on January 1, 2007. Even if it is renewed retroactively, the cash flow burden for many companies is unmanageable, especially given the uncertainty as to when the renewal would actually occur. Allowing the program to lapse also creates wasteful administrative burdens for both business and CBP, since entries must be individually flagged, so that duties collected can be later be refunded.

Deringer recommends that GSP supporters keep apprised of the renewal status, and that they contact their Congressmen to advise them of their support.

Deringer's consulting & regulatory affairs group offers a full scope of services to support importers/exporters, carriers, and supply chain partners. For more information regarding this advisory, please call 518-297-3511, or email us at consulting@anderinger.com