New possibilities for Ukrainian exporters to the USA

On June 29, 2017, the Office of the United States Trade Representative has published amendments introduced to the Generalized System of Preferences (GSP).

For all the countries that enjoy the GSP, a new product group was introduced Traveling-bags (HTC code 4202) allowing to import duty-free to the territory of the US the products such as trunks, suit-cases, vanity-cases, executive-cases, brief-cases, school satchels etc. and allows the Ukrainian producers and exporters to have additional preferences.

This has been reported by the Ministry of Economic Development and Trade of Ukraine.

In 2016 the import to the US of the mentioned product group from all over the world was $10.6 billion but Ukrainian products corresponding to this product group was only $31’000, however, in 2017 the growth of export from Ukraine to the US of Traveling-bags has reached 250%.

As to the appeal of Ukraine to include in the GSP for import to the US of the product group ferromanganese with a carbon content of more than 4%, HTS Code: 7202.11.50, has been denied. According to the official statement of the Office of the United States Trade Representative, the decision has been influenced by the concerns of the US producers of ferromanganese that such a decision will bring negative effect to the domestic market of USA.

The products that can be imported duty-free to the US under the framework of GSP include a wide range of consumer goods, different types of chemicals and minerals, some construction goods, some agricultural goods and commodities as well as fishery products etc.

With coherent and goal-oriented efforts of the Ministry of Economic Development and Trade of Ukraine in the Interdepartmental committee of the GSP and the appeal to the President of the United States Barack Obama on the September 30, 2015, the decision has been made to return the duty-free status to some of the export goods of Ukraine under the GSP allowing to increase the import of Ukrainian goods to the US with a competitive edge.

According to the preliminary information, the Administration of the United States is considering the possibility to prolong the GSP status beyond the year 2017 as there is a strong support in the Congress from both parties to keep the GSP. The experts are sure, that after the decision of June 29, 2017, to include Travel-bags into GSP shows a strong will of the US Administration to extend the validity of the Generalized System of Preferences.

Background information.

GSP came into force on January 1, 1976, according to the US Trade Law from 1974. The Generalized System of Preferences is aimed to support economic growth in the developing countries by granting duty-free and favorable terms for more than 5000 goods and commodities to be sold in the US from the beneficiary countries, more than 120 countries including Ukraine. After a two year suspension, due to the end of the duration of the GSP from August 1, 2013, the President of the United States on June 29, 2015, signed the law that has passed Congress the Trade Preferences Extension Act 2015 that is valid untill December 31, 2017.