Major retailers and trade bodies urged the US government to increase the number of GSP-eligible countries supplying travel goods to the American market, as the current duty beneficiaries are unable to meet demand. Last year, the US Congress included travel goods, such as backpacks, purses, suitcases and laptop cases in the generalised system of preferences coverage. It means that travel goods coming in from the least developed countries and African Growth and Opportunity Act or AGOA countries receive the duty benefit. But many LDCs and African countries that enjoy the duty-free benefit either do not produce those goods or the level of production is too low to meet demand in the US. Bangladesh is a major producer of those travel goods, but unfortunately, its GSP benefit was suspended by the United States Trade Representative in June 2013, citing serious shortcomings in workplace safety and poor labour rights. Bangladesh submitted its workplace safety improvement status twice to the USTR for reinstatement of the trade benefit, but those were not been considered, as the Obama administration thinks a lot more needs to be done to regain the status. Nearly 100 retailers, brands, trade bodies and associations signed a letter to President Barack Obama last week urging him to widen the list of GSP-eligible countries that produce travel goods in bulk quantities for export. “This request comes from the broad industry group because there is widespread support and recognition that expanding these GSP benefits will help American families, support jobs in the United States, and offer incentives to economic development in developing countries, all of which aligns with the administration’s goals,” the letter said. Restricting the decision to the LDCs and AGOA countries greatly limits the development impact because most of these countries do not have the capacity to supply more complicated travel goods products, according to the letter. Extending the eligibility to all GSP countries will enhance the development benefits, while deferring the decision increases business uncertainty and postpones potential new investment and job creation. Of the current GSP enjoying countries, except Cambodia, all other countries do not yet have the capacity to make most of the travel products on a commercial scale. For example, the AGOA countries collectively produce a mere 0.01 percent share of the total US travel goods market, according to data in 2015, the letter said. While AGOA and the LDCs collectively produce 1.3 percent of the US market, of which Cambodia itself accounts for 1.2 percent, the letter added. Despite 15 years of the duty-free access, AGOA in 2015 supplied only 0.05 percent of the total US leather goods market. Limiting the GSP eligibility for travel goods to LDCs and AGOA countries will not change the fundamental commercial, supply chain, and sourcing prospects for these countries or accelerate their development. Factories in the developed countries have production capabilities and a trained workforce and are poised to quickly take advantage of the full GSP travel goods eligibility. Moreover, indefinitely deferring a final GSP eligibility decision for all GSP countries creates significant business uncertainty and negatively impacts potential investment and orders in other GSP countries.
