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Tariffs anew for exports to US as GSP lapses

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Cambodian importers and buyers of the Kingdom’s travel goods to the US are now required to pay import duties as the latter’s Generalised System of Preferences (GSP) preferential tariff system expired on December 31 and is awaiting renewal by Congress. Post Staff

Tariffs anew for exports to US as GSP lapses

Cambodian importers and buyers of the Kingdom’s travel goods to the US are now required to pay import duties as the latter’s Generalised System of Preferences (GSP) preferential tariff system expired on December 31 and is awaiting renewal by Congress.

The US Congress’ delay affects all 119 designated beneficiary countries and territories – Cambodia included – the Garment Manufacturers Association in Cambodia (GMAC) stressed in a January 6 notice.

It said: “Past the latest expiration date, goods that entered the US after December 31, 2020, will be subject to MFN [most-favoured nation] duty rates, but claims for GSP treatment should continue to be made.

“Past Congressional practice has been to extend the programme retroactively from the original expiration date, so that importers are refunded [without interest] for the duties incurred during the lapse.

“We hope Congress reauthorisation will come soon, and we’ll keep all members updated as new information becomes available.”

GMAC deputy secretary-general Kaing Monika told The Post on January 6: “Buyers will have to pay import tariffs for some time. Once US Congress reauthorises the programme, they can claim refunds. But this won’t impact our producers here who will continue to export as normal.

“It’s not just Cambodia facing the lapse of the US’ GSP programme – it’s 119 beneficiary countries. We’ll receive [preferential tariff treatment again] once US Congress renews it [the GSP].”

The US’ GSP programme expired on December 31 as per US Code Title 19 Customs Duties Section 2465, according to the Office of the US Trade Representative (USTR).

“Congress will make any decisions on whether or when to extend authorisation of GSP. The 117th Congress convenes on January 3, 2021,”it said in an announcement.

Kaing explained that the GSP programme has lapsed prior to its reauthorisation in 10 of the 14 times it was extended.

Export and investment in travel goods has seen dramatic growth over the years since the US granted them duty free access in 2016 under the programme, pointing out that the value of exports jumped “dramatically from just $50 million in 2016 to about $1 billion now”.

Established by the Trade Act of 1974, the GSP is the US’ largest and oldest trade preference programme, according to the USTR.

It said the GSP “promotes economic development by eliminating duties on thousands of products when imported from one of 119 designated beneficiary countries and territories”.

An amendment to the GSP that went into effect in July 2016 removed US customs tariffs on Cambodian-made travel products such as luggage, backpacks, handbags and wallets.

The items, which previously faced tariffs of between 4.5 and 20 per cent, were allowed duty-free entry into the US under the expanded programme.

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