Typically, we focus solely on the impacts of GSP expiration on American companies. Yet the story below shows not only the problems caused at home, but also the negative repercussions felt in developing countries. Even worse, the existence of options for exporting duty free to the United States has become a major consideration for American companies that have built their businesses around helping with the poorest of the poor. Clearly, this was not the intention of letting GSP expiration, but it is the result.
The following is text is cut and pasted directly from an email sent by a co-founder of Global Fair Trade Crafts, Inc. in Edgewater, Florida, one of the newest signatories of the GSP Supporter List. We hope Congress has an open ear as well.
We are a fair trade importer and work with artisans in about 20 countries. As a small family-owned US business, we have to make our decisions based on the bottom line and the non-renewal of the GSP severely limits who we can buy from. We have a shipment arriving from India with 11% duty on jewelry that previously came in for free under GSP. It was an $8700 shipment. Business in the US is picking up but we will be forced to shift our buying to our other fair trade producer partners in Africa, Chile, Mexico, Guatemala and Haiti. At least we have that option.
Many of the smaller fair trade businesses that work with one country or one producer may not yet realize the impact of the expiration of the GSP. Non-renewal of the system will not only be devastating for artisans and craftspeople in the country of origin because the orders will disappear, the small US-based fair trade businesses will suffer. They rely on the preferences to make them competitive with the Chinese imports.
I was under the impression that this was just a temporary measure and that we may be able to have the duty refunded. But because we are small and don’t have the resources to track and petition for refunds, we will take the path of least resistance by importing from the countries that have some kind of trade agreement that give us preferential treatment. I know the reason for the non-renewal was not to cripple the handicraft industry in Asia and bring about the closure of small US fair trade businesses, but these kinds of shoot-from-the-hip decisions will certainly cause unintended casualties.
I hope that the members of Congress have an open ear for this discussion.