The doors to a restoring of trade benefits to Myanmar are about to open, following the recent move by the United States to drop economic sanctions due to positive changes taking place in the country.
The restored benefits and new benefits for qualifying goods become effective November 13, 2016, according to a report by Lexology news service on October 21.
This follows the proclamation on September 14 by US President Barack Obama that the US government was ending their suspension issued in 1989 and restoring trade benefits to Myanmar, plus new trade benefits not previously granted, under the Generalized System of Preferences (“GSP”).
The GSP is a duty reduction measure, which provides cost savings and applies to goods covered under thousands of individual tariff provisions. In short, the GSP permits duty-free entry for qualifying goods.
Specifically, the presidential proclamation designated Myanmar as a GSP-eligible beneficiary developing country or BDC, according to the report. Consequently, Myanmar goods qualifying as an “eligible article” pursuant to 19 USC 2463 should be eligible for duty-free entry into the United States on or after November 13.
Moreover, Myanmar’s GSP benefits were expanded through two additional provisions in the proclamation. First, Myanmar was designated as an ASEAN member country for GSP purposes. Consequently, Myanmar will be grouped with Cambodia, Indonesia, the Philippines and Thailand (all ASEAN members designated in the GSP) and the group will be treated as a single BDC for GSP purposes. As a result, materials, components and production from any or all of the designated ASEAN countries may be used to qualify the finished product as GSP-eligible.
Secondly, Myanmar was designated as a “least-developed” BDC, which further expands the list of products from Myanmar potentially eligible for GSP duty-free treatment.
This “least developed” status is beneficial for Myanmar at this time.
GSP questions and related cost savings arise in a number of different contexts, as the report points out. Is a particular product identified in the tariff (the HTSUS) as a GSP-eligible item? Is a particular country (or group of countries) a GSP-eligible BDC? If the production in a BDC involves non-BDC components or materials or if the production takes place in more than one country, then is the finished product GSP-eligible? What records or documents might be required for U.S. Customs and Border Protection?
Analysts claim the dropping of sanctions will dramatically help with bilateral trade and investment.