GRANTING OF GSP BENEFICIARY STATUS TO EAST TIMOR

UNCLAS STATE 202474

SIPDIS

SIPDIS

E.O. 12958: N/A
TAGS: ECON EAID ETRD
SUBJECT: GRANTING OF GSP BENEFICIARY STATUS TO EAST TIMOR



1. This is an action request, please see paragraph 2.


2. While the exact release date remains uncertain, an
upcoming Presidential proclamation will announce the USG's
decision to grant East Timor least developed beneficiary
developing country (LDBDC) status under the U.S. Generalized
System of Preferences (GSP) program, which will provide
significant opportunities for duty-free exports from East
Timor to the U.S. This will be done in two phases: East
Timor will become a beneficiary developing country
immediately upon issuance of the Proclamation. Sixty five
days later, East Timor will become a LDBDC. Post is
requested to inform GOET officials of the decision and
upcoming Presidential proclamation.

Background
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3. The U.S. GSP program provides duty free access to the
U.S. market for approximately 3,400 products from 144
beneficiary countries and territories. In 1996, an
additional 1,400 products were added to eligibility for GSP's
least-developed beneficiary developing countries (LDBDCs).
In August 2006, East Timorese Foreign Minister Guterres wrote
a letter to USTR Schwab requesting that the USG designate
East Timor an LDBDC for GSP purposes. A subsequent
Administration review process considered this request,
recommending to the President that East Timor be so
designated.


4. Sections 501 and 502(a)(1) of the Trade Act of 1974 (19
U.S.C. 2461, 2462(a)(1)),as amended, authorize the President
to designate countries as beneficiary developing countries
for purposes of GSP. A Presidential proclamation designating
East Timor as an LDBDC is expected to be released before
December 31, 2006. East Timor would be eligible for regular
GSP treatment (the 3,400 product list) 20 days after the date
of the proclamation. East Timor's eligibility for further
benefits as an LDBDC (the additional 1,400 products) would
begin sixty five calendar days after the President's
proclamation.


5. Full background on the GSP program can be found at
http://www.ustr.gov. This link includes a list of eligible
GSP products on both the regular and LDBDC list.


6. Follow up inquiries may be directed to Aaron Scheibe in
EB's Office of Multilateral Trade Affairs. Mr. Scheibe may
be reached via email at ScheibeAP@state.gov, or at (202)
647-8202.
RICE