Yesterday, we posted that GSP expiration cost American companies $100 million through the first two months of 2011. If you continued reading beyond the headline, you probably remember us saying that “it’s too soon to make bold claims about the impact on sourcing decisions.” We stand by that statement, but….
Today, we decided to take a look at the import data for top GSP products to see if anything jumped out at us. Mostly, we were looking for noticeable shifts in sourcing away from GSP beneficiaries in favor of other countries. We tried to keep our the analysis pretty simple by:
- limiting it to the top 100 products (by value) imported under GSP in Jan/Feb 2010 (that covers 1/2 – 2/3 of total GSP imports, depending on the year)
- classifying all imports of each product as GSP or “non-GSP” (anything not claiming GSP on its Customs forms)
- calculating the growth rates and changes in market shares for the GSP versus the “non-GSP” imports
- glancing over the results
Still with us? I hope so, because what we found was pretty interesting:
- the value of imports under GSP declined for 54 percent of the products; on the other hand, imports of 88 percent of those same products increased from non-GSP sources
- the median growth rate was -2.9 percent for GSP imports vs. 21.5 percent for non-GSP imports
- the market share under GSP declined for 73 percent of the products
- the median change in market share for GSP products was -1.7 percentage points; considering that GSP counted for less than 1 percent of U.S. imports in Jan/Feb 2011, the drop is quite large)
Do these initial data mean imports claiming GSP benefits will cease without immediate Congressional action? Probably not. But they don’t look very promising either. Let’s hope Congress renews GSP before the March trade data comes out (May 11) and we have to run this analysis again….