MJSA Supports Removal of Indian Chain from GSP Program

Global TradeMJSA, the U.S. trade association dedicated to professional excellence in jewelry making and design, supports the U.S. government’s recent determination to remove duty-free, preferential treatment on gold rope and gold mixed link necklaces from India. The decision was made during the Obama Administration’s annual review of the Generalized System of Preferences (GSP) program.

MJSA had earlier advocated for the removal of duty-free status for these two categories of Indian jewelry imports, during testimony at hearings held by the Office of the United States Trade Representative (USTR), part of the Executive Office of the President, as well as at hearings before the United States International Trade Commission.

Congress created the GSP program in the Trade Act of 1974, to help developing countries expand their economies by allowing certain goods to be imported to the United States duty-free. Once a country’s imports for a specific product rise above a pre-determined competitive-need ceiling, however, they are no longer eligible for duty-free status unless the President grants a competitive-need-limitation (CNL) waiver. In the past, India has been among the countries that have received such waivers and, in fact, the mixed link chains had been granted such a waiver. The President’s action revoked the waiver for these chains from India.

This year, after assessing which products should continue to benefit from duty-free treatment under GSP, President Obama determined that five products from three beneficiary countries were sufficiently competitive in the United States to end duty-free treatment, including the two categories of necklaces from India.

"Duty-free Indian imports of rope chain and mixed link necklaces climbed dramatically from 2006 through 2009, exceeding the competitive need limitations of the GSP," said David W. Cochran, president and CEO of MJSA, during his government testimony. "The competition from these duty-free imports placed a severe burden on U.S.-based suppliers, who are already coping with a massive economic downturn."  
 
The overall growth of lower-priced imports has helped to put the entire U.S. jewelry industry under great strain in the past decade, Cochran added. MJSA has advocated that any country that no longer qualifies for GSP status should no longer receive duty-free treatment.
 
"While the U.S. jewelry manufacturing industry does not want to fall back on protectionist measures, it also does not want to see competitors receive an unfair cost advantage," said Cochran. "The elimination of India’s duty-free status for mixed link and rope chain helps to rectify this situation, and puts U.S. and Indian companies on a more even playing field."