Only marginal impact by US GSP pause | Sunday Observer

Only marginal impact by US GSP pause

The expiration of the US Generalized System of Preferences (GSP) for Sri Lanka on December 31 (today), will have only a marginal impact on exports to the US, a Commerce Ministry official said.

The expiration is not only for Sri Lanka, but includes many other countries. Sri Lanka has a US GSP utilisation rate of 85 percent, one of the highest among US GSP beneficiaries.

“What is important is to understand that the non-renewal of US GSP does not affect our US trade in a significant way,” said the Minister of Industry and Commerce Rishad Bathiudeen on Friday. Sources from the Department of Commerce confirmed that despite the expiration, the issuance of US GSP entitlement certificates by the Department will continue as usual with changes to the present procedure.

It was also revealed that the GSP expiration appears to be a normal event, since the US GSP is routinely reauthorised every year and “the expiration takes place before reauthorisation that arrives a few weeks later.”

The direct beneficiaries of US GSP are US manufacturers who can avail of input material at low or no duties, and indirect beneficiaries being Lankan exporters.

After the reauthorisation takes place, US importers who applied for the Certificates from Colombo and earned it, can submit their claims and collect benefits at their end retroactively. Officials of the US Embassy in Sri Lanka said that the United States Congress did not re-authorise GSP before adjourning for the year.

“The immediate effect of GSP expiration is GSP eligible imports to the United States from Sri Lanka and other GSP beneficiary countries and territories will be subject to non-preferential duties beginning January 1, 2018,” the Embassy stressed. According to the Department of Commerce, the US is the world’s largest buyer of Sri Lankan products.