Picking Winners and Losers in the U.S. Generalized System of Preferences: Improving the Product Competitiveness Test

The U.S. Generalized System of Preferences (GSP) program provides duty-free, preferential access to the U.S. market for 4,881 products, valued at over USD 20 billion in 2009, from 131 beneficiary developing countries (BDCs). This preference program is vital to many developing country export industries and to many U.S. importing and consuming industries. Despite this success, reform is needed. Absent a Presidential waiver, certain limits on eligibility for GSP preferences undermine the value of the program. The limits must be revised and the administration of the program must become more transparent and predictable. It is timely for Congress to make these changes to the law as it considers overall GSP reform and reauthorization of the program.