	Trade Preferences and GATT MFN Requirements

As parties to the General Agreement on Tariffs and Trade 1994 (GATT 1994), World Trade Organization (WTO) Members must under Article I:1 of the General Agreement on Tariffs and Trade (GATT) grant most-favored-nation (MFN) treatment "immediately and unconditionally" to like products of other Members with respect to customs duties and import charges, internal taxes and regulations, and other trade-related matters. Tariff preference programs for developing countries, however, are facially inconsistent with MFN obligations. Because of the conflict with MFN obligations, GATT Parties in 1971 adopted a waiver of Article I for the Generalized System of Preferences (GSP) to allow developed contracting parties to accord more favorable tariff treatment to the products of developing countries for 10 years. The Enabling Clause has since been incorporated into the GATT 1994. The United States has also obtained waivers for the following programs: (1) the Caribbean Basin Economic Recovery Act (CBERA), as amended, through December 31, 2014; (2) the Andean Trade Preference Act (ATPA), as amended, through December 31, 2014; and (3) the African Growth and Opportunity Act (AGOA), through September 30, 2015. The AB found instead that developed countries can grant preferences beyond those provided in their GSP to developing countries with particular needs, but only if identical treatment is available to all similarly situated GSP beneficiaries. In December 2010, Congress enacted legislation extending Andean trade preferences, as accorded to Colombia and Ecuador, through February 12, 2011. Andean benefits for Peru, which has been a party to a free trade agreement with the United States since February 2009, were terminated as of December 31, 2010, in the same enactment. While Congress did not reauthorize the GSP program upon its December 2010 expiration, it has since extended the program through July 31, 2013, and authorized the retroactive application of duty-free rates and other GSP benefits to entries of goods made after December 31, 2010, in P.L. 112-40 . The U.S-Colombia Trade Promotion Agreement Implementation Act, P.L. 112-42 , extended ATPA benefits to Colombia and Ecuador through July 31, 2013, with retroactive application to February 12, 2011; however, pursuant to the act, the President removed Colombia from the GSP and ATPA programs when the U.S-Colombia Trade Promotion Agreement entered into force on May 15, 2012. Congress has made the Caribbean Basin Economic Recovery Act (CBERA) program permanent and has authorized through September 30, 2020, the expanded tariff benefits contained in the Caribbean Basin Trade Partnership Act and as well as tariff preferences for Haiti enacted in 2010. 2387 (McDermott), S. 105 (Ensign), and S. 1244 (Inouye) would extend duty-free benefits to certain apparel items from the Philippines subject to the President's certification that the Philippines is meeting enumerated trade and customs-related conditions. Under H.R. 2387 and S. 1244 , benefits would remain in effect for seven years after they were proclaimed by the President and would terminate were the Philippines to become ineligible for GSP treatment. S. 105 would extend benefits for 10 years after proclamation, subject to GSP eligibility. S. 1443 (Feinstein) would authorize through December 31, 2022, duty-free treatment for certain items deemed import-sensitive under the GSP as well as extend certain AGOA textile benefits for certain least-developed countries in Asia and the South Pacific. H.R.
Article I:1 of the General Agreement on Tariffs and Trade (GATT) requires World Trade Organization (WTO) Members to grant most-favored-nation (MFN) treatment "immediately and unconditionally" to like products of other Members with respect to tariffs and other trade-related measures. Programs such as the Generalized System of Preferences (GSP), under which developed countries grant preferential tariff rates to developing country goods, are facially inconsistent with this obligation because these programs accord goods of some countries more favorable tariff treatment than that accorded to like goods of other WTO Members. Because such programs have been viewed as trade-expanding, however, parties to the GATT incorporated a clause to provide a legal basis for one-way tariff preferences (the Enabling Clause) into the GATT 1994 agreement. In 2004, the WTO Appellate Body ruled that the Enabling Clause allows developed countries to offer differing treatment to developing countries in a GSP program, but only if identical treatment is available to all similarly situated beneficiaries.
In addition to GSP programs, some WTO Members may also grant preferences to products of particular groups of countries. In such cases, Members have generally obtained time-limited WTO waivers of GATT Article I:l and, if needed, other GATT obligations. The United States holds temporary WTO waivers for tariff preferences granted to the former Trust Territory of the Pacific Islands and for three regional preference schemes: (1) the Caribbean Basin Economic Recovery Act (CBERA), as amended; (2) the Andean Trade Preference Act (ATPA), as amended; and (3) the African Growth and Opportunity Act (AGOA).
Congress has made the CBERA program permanent and has authorized through September 30, 2020, the expanded tariff benefits contained in the Caribbean Basin Trade Partnership Act and subsequent legislation particular to Haiti. The AGOA program is authorized through September 30, 2015. In December 2010, Congress extended Andean trade preferences, as accorded to Colombia and Ecuador, through February 12, 2011, and terminated Andean benefits for Peru, which has been a party to a free trade agreement with the United States since February 2009. While Congress did not reauthorize the GSP program upon its December 2010 expiration, it has since extended the program through July 31, 2013, and authorized the retroactive application of duty-free rates and other GSP benefits to entries of goods made after December 31, 2010, in P.L. 112-40. The U.S.-Colombia Trade Promotion Agreement Implementation Act, P.L. 112-42, extended ATPA benefits to Colombia and Ecuador through July 31, 2013, with retroactive application to February 12, 2011; however, pursuant to the act, the President removed Colombia from the GSP and ATPA programs after the U.S-Colombia Trade Promotion Agreement entered into force on May 15, 2012.
H.R. 2387 (McDermott), S. 105 (Ensign), and S. 1244 (Inouye) would extend duty-free benefits to certain apparel items from the Philippines subject to the President's certification that the Philippines is meeting enumerated trade and customs-related conditions. Under H.R. 2387 and S. 1244, benefits would remain in effect for seven years after they were proclaimed by the President and would terminate were the Philippines to become ineligible for GSP treatment. S. 105 would extend benefits for 10 years after proclamation, subject to GSP eligibility. S. 1443 (Feinstein) would authorize through December 31, 2022, duty-free treatment for certain items deemed import-sensitive under the GSP as well as extend certain AGOA textile benefits for certain least-developed countries in Asia and the South Pacific.