Generalized System of Preferences: Agricultural Imports (CRS Report for Congress)
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| Release Date |
Revised Dec. 8, 2016 |
| Report Number |
RS22541 |
| Report Type |
Report |
| Authors |
Renée Johnson, Resources, Science, and Industry Division |
| Source Agency |
Congressional Research Service |
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Summary:
The Generalized System of Preferences (GSP) provides duty-free tariff treatment for certain products from designated developing countries. Agricultural imports under GSP totaled $2.5 billion in 2012, nearly 13% of the value of all U.S. GSP imports. Leading agricultural imports include processed foods and food processing inputs, sugar and sugar confectionery, cocoa, processed and fresh fruits and vegetables, beverages and drinking waters, olive oil, processed meats, and miscellaneous food preparations and inputs for further processing. The majority of these imports are from Thailand, Brazil, India, Indonesia, and Turkey, which combined account for nearly two-thirds of total agricultural GSP imports.
GSP was most recently extended until July 31, 2013 (P.L. 112-40), but was not renewed before it expired. In the past few years, Congress has extended GSP through a series of short-term extensions. Previously Congress has renewed GSP retroactively, and not prior to expiration.
The expiration of GSP means that renewal of the program may continue to be a legislative issue in the 114th Congress. In recent years, GSP renewal has been somewhat controversial. Some in Congress have continued to call for changes to the program that could limit GSP benefits to certain countries, among other changes. Opinion within the U.S. agriculture industry is mixed, reflecting both support for and opposition to the current program. The 113th Congress introduced but did not enact legislation to renew GSP. Additional background information on such legislation is available in CRS Report RL33663, Generalized System of Preferences: Background and Renewal Debate.
Leaders of the House Ways and Means Committee and the Senate Finance Committee have continued to express an interest in evaluating the effectiveness of U.S. trade preference programs, including GSP, and broader reform of these programs might be possible. Congress made changes to the program in 2006, tightening its requirements on imports under certain circumstances.
In addition, recently some countries have been suspended from or included in GSP. Many in Congress were critical of Russia's status as a GSP beneficiary following its invasion of Crimea in 2014. In May 2014, President Obama notified Congress that he intended to graduate Russia from the program, and later officially terminated Russia's GSP status in October 2014. Also, in June 2013, the President announced the suspension of GSP benefits for Bangladesh, but is currently reviewing this decision.
Previously, in March 2012, President Obama suspended GSP benefits for Argentina. Argentina had been among one of the top two beneficiary countries of agricultural imports under the program, after Thailand, accounting for more than one-tenth of all agricultural imports under GSP (ranked by import value). Under the program, Argentina exported more than $380 million of agricultural products in 2012, including casein, olive oil, prepared meats, gelatin derivatives, cheese and curd, sugar confectionery, wine, and other food products. The President suspended GSP benefits for Argentina because "it has not acted in good faith in enforcing arbitral awards in favor of United States citizens or a corporation, partnership, or association that is 50 percent or more beneficially owned by United States citizens."
