The reactivation of the US GSP programme which enables concessionary duties on exports to the USA was approved by Congress this month, but also needs the greenlight from the Senate which is pending.
Ms. Maytree Pereira, Director, PricewaterhouseCoopers LLP USA, speaking at a seminar in Colombo on Thursday said that due to next year’s Presidential elections that approval process may be delayed.
Sri Lanka (SL) is also a beneficiary of the US GSP programme, though garments, Sri Lanka’s biggest export is not captured under that concessionary list.
Exports affected from SL are items such as coir products, activated carbon, solid tyres and rubber gloves; with the duty concession lost going upto as high as 10%.
Sri Lanka exports some US$ 1.6 billion worth of items to the USA annually of which some 7-8% are exported under the USA’s GSP duty free scheme, according to a source.
However apparel which comprises 80% of Sri Lanka’s exports to the USA is not GSP eligible.
The loss due to the non renewal of the US GSP is estimated at between US$ ($) 112-128 million.
The US GSP programme which came into being in 1976 to help developing countries was suspended this year. “Typically it comes up for review once in four years, but in this instance it was suspended after 18 months due to the current crisis,” said Pereira.
Once it’s renewed, its tenure may last a similar period, she said. Upon renewal importers may claim refunds from US Customs for imports made of eligible GSP products from the date of suspension of the scheme
Pereira said that some 171 countries (developing and least developed) are eligible for US GSP benefit, including regional blocs such as SAARC. The programme covers some 3,400 products from developing countries such as SL with the requirement of a minimum 35% local value addition and a further 1,400 products produced by least developed countries such as Bangladesh
The seminar was organized by the Ceylon Chamber of Commerce (see also The Sunday Leader business pages of January 9, 2011).
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