On Wednesday, June 28, the Office of the U.S. Trade Representative published a notice in the Federal Register announcing the petitioning deadlines for the upcoming annual product review under the U.S. Generalized System of Preferences. This provides an opportunity for the members of the Sporting Goods Manufacturers Association to petition for duty-free GSP treatment of any sporting goods articles that are currently dutiable and not already GSP-eligible. Alternatively, members can petition for GSP eligibility to be terminated with respect to products that are currently accorded GSP treatment.

Members of SGMA should remember that GSP benefits are limited to the program’s 140+ beneficiary developing countries. This list of countries does not include China and some other major sporting goods suppliers. Also, footwear and apparel articles are barred by statute from GSP eligibility.

The deadline for filing petitions requesting that products be added to, or removed from, GSP eligibility is Thursday, July 20. This is a tight deadline for prospective petitioners given the substantial information that must be included in a GSP petition. Member companies considering prospective GSP petitions are encouraged to consult SGMA for further background regarding the informational requirements and the overall GSP review process.

“In a nutshell, GSP allows U.S. companies producing products overseas to import their products duty-free provided there is no domestic production of the product,” said SGMA President Tom Cove. “Tariffs are designed to level the playing field between U.S. manufactured products and those products made overseas, since foreign production costs are lower. If there is no U.S. manufacturing of the product, then there is no need for protective tariffs.”

The USTR has established a later deadline of Friday, November 17 for petitions requesting product-specific waivers of the GSP program’s competitive need limits. A waiver allows a beneficiary country to continue to receive duty-free treatment on an article even if its exports exceed a certain dollar value ($125 million for 2006) or 50% of total U.S. imports of the product.

Any changes in GSP eligibility resulting from petitions granted in the upcoming review will take effect on July 1, 2007. In the meantime, it is important for SGMA members to remember that Congress will need to pass legislation renewing the GSP program’s overall statutory authority beyond its current expiration date — December 31, 2006.