GSP and Other Duty Reduction Programs
Our first post of 2017 addressed the potential consequences of finding out you are importing a product that is subject to antidumping duties (ADD) and countervailing duties (CVD) after you’ve already placed the order. This post will describe programs that allow for a reduction or even the total elimination of Customs duties. Two of the major programs are the Generalized System of Preferences (GSP) and Free Trade Agreements (FTA’s).
Although this article is primarily addressed to importers, it is important to note that an FTA is equally beneficial to US exporters. Preferential duty treatment under FTA’s go both ways.
GSP and FTA’s are both are politically oriented programs so they are dynamic in that they need to be renewed on a periodic basis. And although this happens very infrequently, they can also be terminated at any time. They are designed to help promote the economic growth in developing and friendly countries by lowering or eliminating Customs’ duties on goods imported into the United States. Obviously, that lower duty can have a positive effect on a US company taking advantage of the program.
The time to know about and take advantage of these programs is at the time you are making your buying decisions. C J has a person dedicated to compliance and special projects. Her name is Samya (Sam) Murray (firstname.lastname@example.org). Please make use of her expertise in these areas. There is no cost to you for any questions to Sam, unless the answer requires significant research and time.
Finding out which items and which countries are eligible for these programs, however, is only the first step. After determining if your product is eligible, you must then find a supplier in that eligible country that can meet your quality control expectations. It does not work 100% of the time, but we have seen it work more often than not. If you can find that supplier, it is well worth the effort. It is, in effect, found money.