GSP Duty Free Program

Iraq and the U.S. Generalized System of Preferences (GSP) Program

The U.S. GSP program provides significant opportunities for Iraq to increase its exports to the United
States. GSP provides duty-free treatment for about 3,400 types of exports from Iraq and 130 other
developing countries. The purpose of the GSP program is to give these exports a competitive edge in the
U.S. market. U.S. companies and customers are especially interested in buying goods through the GSP
program because the exports are not charged tariffs, upon entering the United States, which can range
from two percent to seventeen percent of the items’ cost. U.S. imports under GSP from January through
November of 2007, totaled $28.6 billion.

Many items are eligible for GSP duty-free treatment. These include most manufactured goods; inputs
used in manufacturing; jewelry; many types of carpets; agricultural and fishery products; and many types
of chemicals, marble, and minerals. Not eligible for GSP duty-free treatment are certain textiles and
apparel; watches; some footwear, handbags, and other leather items; luggage; most cloths and sheets for
kitchen and bedroom use; and work gloves. The chart below shows the percentage of product types
entering the United States under the GSP program in 2006.

U.S. imports from Iraq under GSP were $178,598 in 2006, accounting for 1.58% of overall U.S. imports
from Iraq in 2006. From January through November 2007, Iraq was the 79th largest user of the GSP program. U.S. imports from Iraq that received GSP duty-free treatment were $1,010,818 in 2005, $178,598 in 2006, and
$174,614 in the first eleven months of 2007, as compared to $178,598 in the same period last year.

  • Agriculture, 6%
  • Chemicals, Plastics, Paper, 15%
  • Base Metals and Articles, 12%
  • Fuels, 27%
  • Jewelry and Glassware, 17%
  • Textiles and Apparel, 3%
  • Machinery, Electronics, Transportation, 20%

Additional GSP-eligible articles were exported to the United States between January and November 2007,
but U.S. importers did not claim duty-free treatment for them. Most important among them were $8,230
in fresh or dried nuts in the shell, which are otherwise subject to a 1.3 cents per kilogram duty. This is the
first year since Iraq became a GSP beneficiary in September 2004 that the United States imported these
products from Iraq. Other types of nuts and seeds were exported to the United States in 2005 that were
assessed duties of 17.9 percent, unfortunately, because U.S. importers did not claim GSP duty-free
treatment. Iraqi exporters and U.S. importers may not have be aware of the benefits of the GSP Program.
Outreach and education to provide additional information on benefits provided by the GSP program is a
key U.S. priority.

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