On Monday, AmCham office hosted a session with Mr. Erland Herfindahl, Deputy Assistant at the US Trade Representative for the Generalized System of Preferences (GSP).
GSP is a program facilitated by the US to offer a range of preferential tariff reductions on eligible products. The eligibility of product types for GSP tariff reductions and the size of the GSP tariff reductions are determined on a case-by-case basis.
Information on whether a product type is eligible can be found through the US’s Harmonized Tariff Schedule. This tariff list includes 11,083 products, from horses (0101.12.00) to antiques (9706.00.00).
Currently, 3,256 products are eligible for GSP. Products labeled with A or A*, in the [rates of duty: special] column found on the right-hand side are eligible for GSP.
For example, in-shell walnuts (0802.31.00) exported to the US are eligible for GSP tariff reductions as they labeled with A [rates of duty: special column].
Once a product type has been found to eligible for GSP. The specific Moldovan product that is in this category must also meet certain requirements to enable the tariff reductions.
The requirements are as follows:
- The product must be developed within a country with GSP (Moldova has GSP)
- The local content of the product must be ≥35% of the products value.
- The product cannot enter the commercial circuit of another country, e.g. the product cannot be started in Moldova then sent to the EU for completion and export.
- The benefit must be requested by the US importer.
- Records for GSP must be kept track of.
As noted in the requirements, for a reduction in tariffs to be applicable, the US importer must select this option on the import tariff documents. Currently, not all US importers of GSP eligible Moldovan products are utilizing this tariff reduction. Hence it is of utmost importance that current and potential importers are notified of Moldovan GSP eligible imports.
By the utilization of GSP, Moldovan companies can make their exports more attractive to the US market, both increasing profits and diversifying export portfolios.
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