US trade body reiterates support for GSP revival

The American Apparel & Footwear Association (AAFA) has expressed support for revival of the Generalised System of Preferences (GSP) to reduce costs faced by US citizens.

Introduced in 1976, the GSP was a trade scheme allowing least developed and developing countries to export goods to the US at a low duty, if none at all in some cases.

Bangladesh was suspended from it in June 2013 after two industrial disasters, the Tazreen Fashions fire and Rana Plaza building collapse, over serious shortcomings in labour rights and workplace safety.

The scheme was cancelled for all beneficiary countries in December 2020.

"The apparel and footwear industry encourages Congress to quickly pass the GSP Reform Act," said Steve Lamar, president and chief executive officer (CEO) of the AAFA, in a statement on April 15.

"GSP has always had bipartisan support, and the record long lapse has been unexplainable and damaging to American businesses, American workers, and beneficiary countries alike, all while handing a huge trade win to China," he said.

"This retroactive renewal is far more effective at making our trusted partners more competitive than misapplied tariffs will ever be," he said.

"This GSP program is also helpful to mitigate the costs faced by our nation's supply chains during this time of continuous disruption," said Lamar.

"Once renewed, this can have a very real impact on the cost and offering of everyday goods such as luggage for summer travel and backpacks for school in the fall," he said.

"We were pleased to see several proposed reforms, including measures to update the competitive need limitation mechanism and open a process to consider currently ineligible products," said Beth Hughes, vice president of the AAFA for trade and customs policy.

Bangladesh has been putting in the effort to enjoy the duty benefit on exports, State Minister for Commerce Ahasanul Islam Titu told The Daily Star over the phone yesterday.

Bangladesh has fulfilled 16 conditions for the reinstatement of the GSP and submitted the progress report to the United States Trade Representative twice.

However, on different occasions the US has been saying that Bangladesh needs to do more.

Prior to the suspension, Bangladesh was exporting goods, such as dry fish, tobacco items and ceramics and excluding the main export item, garments, worth $34 million under the GSP.