Exporting to the U.S. under the Generalized System of Preference (GSP)

The General Manager of CANEB gives the floor to a participant during the question and answer session of the seminar held at Universidad Franz Tamayo. Photo: U.S. Embassy (State Department)

The National Chamber of Exporters of Bolivia (CANEB), the U.S. Embassy and Universidad Privada Franz Tamayo, sponsored a seminar/workshop on how to export to the U.S. under the Generalized System of Preferences (GSP) in La Paz and El Alto on July 12-13.

The seminar attracted a large number of participants, including private citizens and institutions interested in exporting to the United States, as well as members of the chambers of commerce, industry and exports. The seminar was successfully in providing information on the nature of the GSP and the large number of products that can be exported to the United States under this trade preference system. According to the Bolivian National Institute of Statistics, based on data collected through May, 2010, the United States is the second largest market for Bolivian exports.

The speakers, Jose Ribero, CANEB Commercial Manager, and Ivan Chire, U.S. Embassy Trade Adviser, also provided an overview on the GSP, its beneficiary countries, and the requirements to export to the U.S. market. They also reported on Bolivian products currently exported under the tariff preferences and on items not currently benefiting from this trade opportunity. Of 3,400 eligible products under the GSP, Bolivia currently exports only 105.

"In the pursuit of knowledge about Bolivian products and admission standards to the U.S. market, the National Chamber of Exporters and the U.S. Embassy joined to offer this seminar on the GSP to create opportunities to better use the unilateral preferences offered to us," Ribero said. "The information on the composition and performance of Bolivian exports gives us understanding about the country's possibilities and potential. This information is complemented with an understanding of the regulations of market access. Overall, these are the most important elements in developing a successful business."

Chire reported in that in 2009, 25% of Bolivian exports to the United States entered under the GSP. "However," he said, "an amount in excess of $800,000 was unnecessarily paid, as Bolivian exporters failed to claim this important trade benefit. This is the kind of mistake that should be avoided and one that Bolivian exporters cannot afford to make. The U.S.-granted GSP has benefited Bolivian exports for over 34 years by allowing products to enter the U.S. market free of tariffs. It is important that the Bolivian exporters get acquainted with these benefits because the universe of potential exports is large and the agreement provided under this preference system is highly stable."

The Generalized System of Preferences

• The GSP was established by the United States Congress in 1974 to provide competitive advantages in the U.S. market to 3,450 types of products from 131 developing countries, which can enter the U.S. duty free. At the same time, the GSP expands the options for U.S. industries and consumers.
• In 2009, Bolivia exported to the U.S., under the GSP, products valued at $123,900,000 or about 25% of Bolivia's total exports to the United States. 
• Of the 3,400 eligible products under the GSP, Bolivia currently exports only 105. 
• Currently, Bolivian exports to the U.S. under the GSP are: 
• Precious metals, gold and silver jewelry, wood products, silverware, palm heats, ceramic handicrafts. 
• In 2009, Bolivia exported to the U.S. $860,000 in products eligible under the GSP, but the importers did not request tariff preferences.
• To qualify for duty-free treatment under the GSP, the goods must be imported into the United States directly from Bolivia, or pass through another transit country with a Bill of Landing.  
• The products must be produced in Bolivia.
• If the product includes materials imported by Bolivia, the cost of the Bolivian materials plus the cost of processing must equal at least 35% of the product’s sales price;  
• It is essential that the U.S. importer request tax exemption under the GSP by writing a letter "A" before the product’s tariff number on U.S. entry customs form 7501. If the importer forgets to do so, he/she can then apply for reimbursement from U.S. Customs.
• The exporter has to remind the importer that a given product is eligible for GSP and that he/she should make sure to write a letter "A" in the U.S. Customs form.  
• Among the Bolivian products eligible under GSP preferences are: cocoa powder, wine, potatoes, dried fruit and berries, nuts, dried flowers, wood carvings, traditional games, musical instruments, paintings, sculptures, tapestries, hats, rugs, baskets.
• Among the products not eligible under the GSP program are: most textiles and apparel, watches, shoes, bags, suitcases, gloves, and leather products.