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  January 4th, 2018 | Written by

Trump Changes GSP Eligibility for Ukraine, Argentina

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  • Ukraine’s partial suspension from GSP stems from failure to provide adequate protection of intellectual property rights.
  • Argentina is being reinstated to the GSP program following resolution of disputes with US companies.
  • Gambia lost its AGOA eligibility in 2015 due to human rights abuses.

President Donald Trump suspended some of Ukraine’s benefits under the Generalized System of Preferences program (GSP) in a decision announced last week. At the same time, the president restored GSP eligibility for Argentina, and restored eligibility for Gambia and Swaziland to the African Growth and Opportunity Act (AGOA).

Ukraine’s partial suspension from GSP stems from its failure to provide adequate and effective protection of intellectual property rights (IPR) despite years of encouragement and assistance from the US Government.  The President has decided to provide 120 days’ notice in this case because the Government of Ukraine has a viable path to remedy the situation, including improving the current legal regime governing royalty reimbursement to right holders’ organizations.

Argentina is being reinstated to the GSP program effective January 1, 2018 following resolution of certain arbitral disputes with US companies, new commitments by the Argentine government to improve market access for US agricultural products, and improved protection and enforcement of IPR.  Due to certain remaining IPR issues, the restoration of GSP benefits for Argentina will not apply to all eligible products.

Gambia lost its AGOA eligibility in 2015 due to human rights abuses and the deterioration of the rule of law.  Following democratic elections in December 2016, The Gambia has made progress in strengthening the rule of law, improving human rights, and supporting political pluralism.

Swaziland lost AGOA eligibility in 2015 due to concerns over restrictions on the freedoms of peaceful assembly, association, and expression.  The United States set a series of benchmarks related to lifting restrictions on freedoms of assembly, association, and expression Swaziland would need to meet to regain AGOA eligibility.  Swaziland met the last of these benchmarks in November 2017.

The US Trade Representative is conducting a separate AGOA out-of-cycle review for Rwanda, Tanzania, and Uganda in response to a petition asserting that their phased ban on imports of used clothing is negatively impacting US jobs. This review is ongoing.

Under US trade preferences programs, including GSP and AGOA, certain products can enter the United States duty-free if beneficiary countries meet the eligibility criteria established by Congress. GSP criteria include, among others, respecting arbitral awards in favor of US citizens or corporations, combating child labor, respecting internationally recognized worker rights, providing adequate and effective intellectual property protection, and providing the United States with equitable and reasonable market access.

AGOA eligibility criteria include making progress toward establishing political pluralism, the rule of law, and a market-based economy; elimination of barriers to US trade and investment; protection of internationally recognized worker rights; a system to combat corruption and bribery; and economic policies to reduce poverty.