CNL Waiver/1995 Exclusion Requests as Part of 2009 GSP Review Due November 17th
The Office of the U.S. Trade Representative has issued a notice reaffirming the previously announced deadline of November 17, 2009, for the submission of petitions requesting (1) Competitive Need Limitation (CNL) waivers and (2) determinations regarding eligible products not produced in the U.S. on January 1, 1995, as part of the 2009 Generalized System of Preferences Annual Review.
Sign up for a free preview to unlock the rest of this article
Communications Daily is required reading for senior executives at top telecom corporations, law firms, lobbying organizations, associations and government agencies (including the FCC). Join them today!
CNL Waiver Requests Ask That Duty-Free Treatment Continue for Country/Tariff Number Pairs That Exceeds an CNL
There are two types of CNLs1 - the value CNL (which is $140 million for 2009) and the 50% CNL2 (equal to or greater than 50% of the 2009 value of total U.S. imports of the tariff number from all countries)3.
Once either limit is reached, trade is considered "competitive" and imports of the article automatically become ineligible for GSP duty-free treatment, unless a waiver is granted.
According to USTR, available 2009 U.S. import data can be obtained from the ITC website, http://dataweb.usitc.gov. Statistics from January - September 2009 will be available on November 13, 2009, and should be reviewed to determine whether any country/tariff number pairs of interest already exceed, or are close to exceeding, the 2009 value CNL or 50% CNL, and therefore need a CNL waiver petition to be filed.
(CNL exclusions will be based on full calendar year import data. Full calendar year 2009 data for individual HTS subheadings will be available in February 2010 on the ITC website.)
Products Not Produced in U.S. on Jan 1, 1995 May be Exempt from 50% CNL
Under 19 USC 2463(c)(2)(E), the USTR determines, upon request, whether a like or directly competitive product was produced in the U.S. on January 1, 1995.
If it was not so produced, that product is exempt from the 50% CNL and is added to USTR's list of such products. See the USTR's list of articles not produced in the U.S. as of January 1, 1995 in the February 2009 edition of the GSP Guidebook at http://www.ustr.gov/sites/default/files/U.S.-Generalized-System-of-Preferences-Guidebook.pdf.
GSP Scheduled to Expire on Dec 31st, Congress Continues Work on Trade Preference Reform Package
The GSP program (A, A*, A), for most beneficiary countries, i.e., other than those listed as AGOA beneficiary countries, will expire on December 31, 2009, unless a law extending it is enacted.
According to congressional sources, the House Ways and Means and Senate Finance Committees continue to actively work on a trade preference reform package, which would include GSP (and the other trade preference programs). The sources added that the committees have not yet decided how it will approach the issue of extending GSP beyond December 31, 2009 if the reform package is not completed in time.
(The USTR recently issued a notice announcing that it had accepted seven petitions in connection with the 2009 GSP Annual Review to modify the list of products that are eligible for duty-free treatment under the GSP program. See ITT's Online Archives or 10/23/09 news, 09102310, for BP summary.)
1CNLs do not apply to least-developed beneficiary developing GSP countries (LDBDCs) or beneficiary African Growth and Opportunity Act (AGOA) GSP countries.
2The President may also waive the 50% CNL with respect to an eligible article imported from a beneficiary developing country if the value of total imports of that article from all countries during the calendar year did not exceed the applicable de minimis amount for that year. Comments on de minimis waivers will not be accepted at this time but are expected to be requested after publication of a separate Federal Register notice following the availability of full 2009 calendar-year data.
3The Tax Relief and Health Care Act of 2006 also allows the President to revoke a CNL waiver that has been in effect for at least five years for a GSP-eligible product from a specific country, if its annual trade level in the previous calendar year exceeds 150% of the annual monetary threshold (approximately $210 million in 2009) or comprises 75% of all U.S. imports of that product. (See ITT's Online Archives or 12/20/06 news, 06122005, for BP summary.)
(See ITT's Online Archives or 06/08/09 news, 09060805, for BP summary on CNL waiver requests being due on November 17th. See ITT's Online Archives or 05/28/09 news, 09052820, for BP summary of the USTR announcing the 2009 GSP Annual Review and deadlines)
USTR contact - Tameka Cooper (202) 395-6971or Tameka_Cooper@ustr.eop.gov
USTR notice (FR Pub 11/03/09) available athttp://edocket.access.gpo.gov/2009/pdf/E9-26409.pdf